China In Turmoil : Reports That China May Be Forcing Americans to Stay at Mine : U.S. Seeks to Clarify Status of Occidental’s Workers

The status of a large contingent of Americans employed at Occidental Petroleum’s huge coal mine project in central China was called into question Saturday by diplomatic reports that the workers are being required to remain in the country to keep the mine running.

According to one diplomatic source here, Chinese officials “won’t release the American technicians for reasons of what they call national security.”

Another well-informed source confirmed Saturday that “there’s a substantial group there (at the coal mine), and they (Chinese officials) want them to continue operating. If they left, the mine would have to shut down.”

Seeking Clarification

Officials at the State Department, which has strongly urged all Americans to leave China because of the bloodshed and turmoil, said late Saturday that they are seeking clarification of the situation at the mine.

But officials at Occidental headquarters in Los Angeles said emphatically that nobody is being held at the mine involuntarily. Company spokesman Howard Collins said: “There is absolutely no truth that anybody is being held there against their will.”

One State Department official noted that Chinese leaders have taken pains to assure outside commercial interests that they are still welcome and said it is “almost inconceivable” that the Chinese would flatly refuse to let American workers leave.

He said that the Chinese were more likely to pressure key workers to stay by warning that “there would be consequences,” such as the loss of a job, if they left.

Occidental said it has about 85 non-Chinese employees, mainly Americans, working at the Pingshuo coal mine project, which is located at Antaibo, a remote site 230 miles southwest of Beijing in Shanxi province.

State Department officials in Washington said that most other American employees of U.S. firms in China appear to be leaving the country. On Thursday, the operators of Oxy’s mine announced they were moving about 50 dependents of the non-Chinese mine technicians out of China as well as eight employees based in corporate offices in Beijing, where much of the violence has taken place.

But at the same time, an official of Island Creek Corp.--the Occidental coal mining subsidiary in Lexington, Ky., that is running the China mine--was quoted as saying, “We’re planning to keep people” at the mine site. “There’s no safety problem.”

One source in Hong Kong stressed that the Americans are not being held hostages but are being required to stay at work rather than leave China.

It wasn’t immediately clear whether any American employees at the mine have left or asked to leave. An American official who heads Occidental’s mining venture in China, however, said he was not aware of any problems for Americans at the mine.

“I don’t know of any restraints (on Americans leaving),” said Noel Hurley, president of Occidental’s Island Creek of China venture. “As of this morning, there were no restraints.” He said reports of Americans being denied permission to leave were “speculative, unfounded hearsay.”

Asked whether the Chinese joint-venture company itself, in which China is the majority shareholder, had barred employees from leaving the country, Hurley replied: “That’s something I just can’t address.”

One of the sources familiar with the dispute over evacuation of Oxy’s employees said the American company is extremely sensitive because of the possible financial implications of pulling the Americans out of China.

“They’re worried that if people leave, they could lose their investment there,” the source said.

The mine project was personally negotiated by Occidental Chairman Armand Hammer, who met repeatedly with Chinese leaders, including Deng Xiaoping, during the prolonged contract talks. At one point, Hammer overcame serious opposition from the firm’s board of directors to his plans for the China venture.

Hammer was said to be in New York on other business Saturday.

The mining project is one of the largest in the world and represents an investment by both sides of about $750 million. It is the largest single foreign investment in China. Occidental, through its Island Creek subsidiary, owns 25% of the venture. Chinese interests own the rest.

The coal mine project is expected to provide enormous new sources of coal for China’s factories, which face chronic energy shortages.

A diplomatic source in Beijing, contacted Saturday, said that “perhaps some (American personnel) had to stay behind to keep the turbines running. Otherwise, they (Oxy) would lose their big investment.”

Mann reported from Hong Kong and Woutat from Los Angeles.

CAUGHT IN THE MIDDLE Background: The mine at Antaibo is a $750-million project that opened in September, 1987. In addition to Los Angeles-based Occidental Petroleum, which owns 25% of the mine, partners include the Bank of China Trust and Consultancy Co. and the China National Coal Import and Export Corp. It is China’s largest joint venture with a foreign firm. The project was initiated by Occidental Chairman Armand Hammer in talks with China’s paramount leader, Deng Xiaoping, in 1979. Construction began in 1985.

Employees: About 85 are non-Chinese--mainly Americans.

Evacuees: About 50 dependents of the mine’s non-Chinese workers were flown out of China on Thursday, as well as eight Occidental Petroleum employees based in corporate offices in Beijing. At the same time, an official of Island Creek Corp., the Oxy coal mining subsidiary in Lexington, Ky., that is running the mine, was quoted as saying, “We’re planning to keep people (at the mine site). There’s no safety problem.”

Production: The mine is expected to produce about 13 million tons of coal in 1989. All but 10% is earmarked for export.