MINES WILL PAY IN THE END

In addition to the industry overhaul, the government is also considering establishing a compensation plan to force mining companies to pay for their use of pastures.

Under the compensation plan, the companies will be forced to compensate local residents for a variety of problems caused by the mines, including water loss and damage to grasslands. The plan will allow these companies to compensate the residents by providing jobs or "substantial" subsidies, the regional government's deputy secretary-general Zhang said.

He said the details of the plan will be made public after the plan is finalized.

Zhang said the local government might also raise pollution control standards regarding the construction of new mines.

Yu Guangjun, director of the economic research bureau of the Academy of Social Sciences of Inner Mongolia, said the current mechanism used to evaluate the mines needs to be improved in order to truly gauge the impact of the mines on underground water supplies.

Yu said that coal-hauling routes should also be changed to keep the coal trucks away from herders' settlements.

The cost of adjusting the mining industry's policies is not yet clear, but officials say the welfare of local residents is set to be boosted.

Bagatur said there are 1.5 million people living under the poverty line in Inner Mongolia. About 74 percent of these people live in ethnic minority areas.

The regional government has vowed to double the incomes of herders in five years from the current annual average of 5,530 yuan (851 U.S. dollars).

"For Inner Mongolia, the welfare issue is not just an economic or social issue. It is a political issue that concerns ethnic unity and stability," Bagatur said.