By intern reporter Lu Minghe

At least 31 people are dead and 19 others injured after an explosion in a hospital garage in Xuangang, Shanxi province. Several staff members at Xuangang Hospital had apparently been using the space to store more than two tons of illegally acquired explosives for use in their unlicensed coal mine.

The chief suspect in the case, the hospital’s 41-year-old chief of logistics Wang Jinshen, turned himself in to authorities on April 13th. He told police that since his mining license had lapsed, he could no longer legally purchase explosives, so he and his driver had bought them on the black market and stored them in the garage. He lives 800 meters from the garage and fled in panic with his driver after seeing the destruction.

The explosion completely destroyed the two-story garage structure, which was home to three families. Two of those families, totaling seven people, died in the accident; a third family was out at the time. The remaining casualties occurred in a five-story hospital employees’ residence building on one side of the garage. A small 25-room hotel on the other side also sustained heavy damage.

As horrific as the accident was, it is not the first of its kind in the region and is unlikely to be last. Illegal mining explosives have caused several fatal accidents in the Xuangang region, which has seen a huge increase in unlicensed small-scale coal mining.

Xuangang has no shortage of coal; its hills may harbor as many as 1.12 billion tons, and the region currently produces 4 million tons annually. The local mining industry flourished after Soviet experts helped the local government build large coal mines and a coal-fired power station in the 1950s. But after decades of mining, the coal resources is in steady decline. While the big state-owned coal mines find it increasingly difficult to maintain their production levels, private small coal mines are booming.

And many are turning handsome profits. Wang Jinsheng, the man blamed for the disastrous explosion, is only one of hundreds of private businessmen running similar small coal mines, and most are aware of the risks.  Li Yuefeng, a worker at Xuangang Coal and Electricity Co., Ltd, estimated that the owner of a small coal mine might make a 60 yuan profit for every ton of coal his company produces; an average size mine has a 300-500 ton daily capacity, and some larger mines with transfer belts can produce as many as 2000 tons. With profit margins like those, it’s no surprise that everyone wants a piece of the pie: one mine run by a Cantonese boss reportedly broke even on a 30 million yuan initial investment within two months.

Last year, local and central government authorities began to crack down on government officials who were also involved in private coal mine development. But a solution is elusive because the mining industry is closely tied to the government. One local resident said that officials know about all of the private coal mines in the area; owners share their profits with the authorities and collaborate on business ventures.

Since the garage explosion, the Shanxi provincial government has promised to regulate the explosives market, and the Xuangang Coal and Electricity Co., Ltd has said it will inspect all explosives stored in its various warehouses. But – as evidenced by a procession of a dozen coal trucks snarling traffic in the city during a Caijing reporter’s recent visit – in the private sector, the coal business is booming. It shows no signs of slowing down.

English version by Zhu Hongbin