China shuts mines, oil wells and plans after quake

China ordered coal mines, chemical plants and oil and gas wells to halt production to avoid further casualties after the country’s strongest earthquake in 58 years killed almost 10,000 people.

Companies in affected areas must evacuate workers and can’t resume output until conditions allow for safe operations, the Beijing-based State Administration of Work Safety said on its Web site Tuesday. Sichuan province, where Monday’s 7.9 magnitude temblor struck, holds about 40% of China’s natural gas reserves and accounted for 22% of its output in 2006.

The earthquake damaged power plants and transmission lines and may cut the nation’s energy demand. The State Electricity Regulatory Commission, China’s power industry regulator, Tuesday ordered “24-hour” monitoring at generation and distribution networks and asked utilities to report accidents immediately.

“This earthquake in China may impact demand from power plants being down,” Phil Flynn, a senior trader at Alaron Trading Corp. in Chicago, said in a telephone interview. “Demand for oil was already down in April.”

Financial Post