Coal production at state-run mines has fallen by four million tons. According to Mykhailo Volynets, MP and chairman of the Independent Union of Ukrainian Miners, this deficit may reach five million tons by the end of the year. To tell the truth, the nationwide drop in coal production is only 2.5 million tons thanks to privatized mines, the best in the fuel and energy complex. Not only are they not reducing the production rate, they are boosting it.
Volynets does not think there has been a “Ukrainian miracle” in the energy sector. “When oil and gas prices were on the rise throughout the world, we expected the government to try to improve coal mining. Fat chance! Instead, this industry fell pray to oligarchs, who demanded a 40-percent price cut on iron ore and manganese concentrate. They even brought in coal and ore from the US, Poland, Russia, and Brazil to put the skids under Ukrainian coal and ore mines,” the trade union leader says bitterly. The lengthy negotiations resulted in a memorandum stating that prices would be cut by 18 percent and miners’ wages would remain intact. According to Volynets, the only reason why the miners signed this document was again to become part of the coal-coke-ore-metal chain.
But the miners reaped no benefits from the creation of the Ministry of Coal Mining largely because, in Volynets’ opinion, it took this ministry six months to take shape. Even now all the posts at the ministry remain vacant except for the minister and his deputies. The Ministry of Coal Mining does not even have its own administrative building. The premises it once owned are now occupied by the Ministry of Fuel and Energy.
Still, one fact proves that the ministry does exist: it has hit upon the idea of privatizing the coal-mining sector — a real bete noire for the miners. “We don’t know what is in store for us,” fumes the indignant Volynets. “We have the experience of Krasnodon and Pavlohrad. But nobody consults with us. Since all kinds of investors and owners are coming, we must seek an individual approach. We don’t know who these owners are and what our role and place in this process is.”
The union’s experts estimate that about 70% of mines will be decommissioned as part of this privatization. Volynets thinks that in order to forestall such negative consequences, the mines must be restructured, which again requires money. “Ukraine received $300 million for this from the international community, but all this money has been embezzled,” Volynets claims, “because there was no restructuring at all.” The only achievement was a small rise in miners’ labor productivity. Technical equipment is worsening. Occupational safety is still a problem. Miners are among the worst-paid in the industrial sector.
Volynets told The Day that restructuring the coal-mining sector needs a yearly injection of more than two billion hryvnias, while only 1.2 billion hryvnias have been projected in the budget since independence and allocated even less — 572 million.
Coal mining requires huge infusions of money. The situation is paradoxical: this country has long been increasing its GDP by subsidizing this sector, but that practice has been discontinued, judging by today’s statistics. This does not mean, however, that the coal industry does not need budgetary subsidies. Volynets thinks that next year’s budget should have UAH 6.5 billion for this purpose. “If worse comes to worst, we could do with 5.6 billion,” he reflects, mentally calculating something (retooling will take about two billion, some money will go toward ensuring occupational safety, cutting coal production costs, etc.), “but absolutely not with the 4.3-4.6 billion that the government is offering today.” The Cabinet of Ministers is also going to provide half this amount from a special fund. If this is really true, will the miners really receive the required amount in full?
Volynets is sure that if budgetary funding is not increased and domestic coal prices are not brought in line with market prices, there will be no result. So miners will have no alternative but to go to the barricades. “We decided in late September to prepare for wide-scale protest actions in order to exert pressure on the government,” the trade union leader says, “so that the government finally realizes that there are serious problems. We must address them together instead of saying that everything is fine and back wages have been paid. Yes, arrears have been cleared at the budget’s expense, but they are still rising. We are now clearing the current wage arrears only because no new coal extraction sites are being set up.” In this case, what energy security for Ukraine are we talking about?
Bitter experience has taught the miners that the authorities will only reckon with them when they shut down the mines and stop producing coal. A strike has been slated for February 2006, right before the elections. And who was it that said that Yulia Tymoshenko and Viktor Yushchenko are not going to compete in them?
