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On September 26, Cailian News (reporters Liu Yue and Liang Xiangcai) reported that the leading coal company in Southwest China, Guizhou Panjiang Refined Coal (600395.SH), had a major accident at its Shanjiao Tree Coal Mine last year, resulting in multiple casualties. Now, one year later, the administrative penalty for this accident has been issued, with the relevant authorities proposing an administrative fine of 15 million yuan for the Shanjiao Tree Mine.

Guizhou Panjiang Refined Coal announced tonight that on September 24, 2023, a major fire accident occurred at the Shanjiao Tree Coal Mine in Panzhou City, Liupanshui City, Guizhou Province, resulting in 16 miners dead. Recently, the Shanjiao Tree Mine received a "Notice of Administrative Penalty for National Mine Safety Supervision," proposing an administrative fine of 15 million yuan for the Shanjiao Tree Mine due to its responsibility for the accident and violation of relevant laws.

The company stated that after the accident, the Shanjiao Tree Mine was ordered to suspend production for rectification. After rectification, production at the Shanjiao Tree Mine resumed on January 25, 2024. Currently, the production and operation of the company and its subsidiaries are normal, and the aforementioned administrative penalty will not have a significant impact on the company's production and operation.

An industry insider told Cailian News that first and foremost, safety production is the top priority for coal companies. In recent years, regulatory authorities have conducted very frequent inspections on safety and environmental protection. This case involves a major accident, and the company may be closely watched by the safety supervision department. Secondly, during the production suspension and rectification period, the company's production capacity will be affected. In addition, when financing, due diligence will be conducted, and negative events of the company will be questioned for its safety management level, which is not conducive to financing.

The Shanjiao Tree Coal Mine is one of the main mining areas under Guizhou Panjiang Refined Coal. Public information shows that the Shanjiao Tree Coal Mine has a capacity of 3.1 million tons per year, and the company's target for 2024 is to produce 15.6 million tons of raw coal and 10.13 million tons of saleable coal.

In terms of performance impact, the Shanjiao Tree Coal Mine was shut down for the entire fourth quarter of last year (resuming production on January 25 this year). During that time, the company incurred a net loss of 40.34 million yuan in Q4, the first quarterly net loss since the second quarter of 2016. In the first half of this year, Guizhou Panjiang Refined Coal saw a decrease in revenue and net profit. The company stated that due to factors such as high safety pressure and increased investment in coal mine safety production, the sales volume of saleable coal significantly decreased compared to the same period last year, and the cost of producing a ton of saleable coal increased compared to the same period last year.

In fact, the penalty for the Shanjiaoshu Coal Mine accident at the foot of the mountain had already been imposed two days ago. According to CCTV news, on September 24, Guizhou Province reported on the investigation and handling of the major fire accident at the Shanjiaoshu Coal Mine in 2023, holding 75 responsible personnel accountable. The Guizhou Bureau of the National Mine Safety Supervision Administration fined Shanjiaoshu Mine 15 million yuan according to law, temporarily suspended its "Safety Production License," included it in the list of serious dishonest entities, and revoked its first-level standardized mine level.