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"Getting coal underground is much more risky than flying into space"

Alexander Kovalchuk, Adviser to the General Director of OAO Russian Coal, Director General of the Institute of the Coal Market Conditions - on what "ceiling of opportunities" the Russian coal industry can count on

- Alexander Borisovich, the recent terrible accident at the Vorkuta mine "Severnaya" once again stirred up the talk about "the curse of the coal industry." Can such disasters be prevented or are they really inevitable and will be repeated regardless of the technical equipment of the mines?

"Getting coal underground is much more risky than flying into space"
Special project Coal of the East of Russia
- I would not call it a "curse" - it's too emotional. But as a specialist I can say (and colleagues, I think, they will agree with me) - there is absolutely no guarantee that there will be no accident in the coal industry. This is an element, and so complex that the flight into space compared with it seems more predictable. In the sky, everything can be calculated and determined, and under the ground - continuous probabilities. The same coal seam in different parts of the panel behaves differently. There are a lot of factors - from the eternal "human" to the unpredictable natural. Of course, preventive measures play a big role - for example, individual protection of miners, ventilation systems, monitoring of the atmosphere in the faces. When they are at the height, the risk is reduced to a minimum. But completely, unfortunately, does not disappear.

- The question as a specialist with many years of experience. What, after all, triggered the accident on the "North" - people or technology?

- Again, no one can completely call the true reason. Not because it does not want - just everything is very difficult. Such cases always represent a tragic overlap of several negative factors at once. In addition to violations of organizational and technological discipline, there is such a thing as manifestations of rock pressure. Severnaya is one of the most gas-dangerous mines in Russia. One spark in an atmosphere saturated with gas — and an explosion occurred in the developed space, a large-scale collapse of the roof, and then everything started up, incrementally.

You see, the mine was equipped with atmospheric monitoring systems, and each of the miners had individual sensors. The release of gas in a hazardous formation was predicted. And, nevertheless, the state of emergency has occurred - experts still have to understand its reasons. Usually, in such strata, in order to relieve tension, the underlying layer is being worked through, it seems as though they did so on the "North". But how much the upper, four-meter layer was unloaded by the underlying lava, whether there were any obstacles and foreign objects left there, experts will study for a few more months. And still the output will be standard: "In all likelihood, the reasons were ..." There is usually no unambiguous answer.

- Is there any chance at all to identify the most dangerous industries in Russia and close them? How is the accident rate in our mines different, for example, from South Africa, USA, Australia or closer to us in the technological level of China and Ukraine?

- In Soviet times, injuries statistics was - 1 case on 1 million tons of coal mining. When mining 750 million, consider for yourself how many people died or received serious injuries. Now these figures have been reduced to the level of 0,07 on 1 mln. Even despite those large-scale accidents, which periodically, alas, occur. With other countries, the comparison is not always correct, because coal is mined in different conditions. For example, in Australia and the USA, mines are much smaller than ours, no one works at depths up to 800 meters. Mainly used open (career) method. In addition, complex mine degassing systems are used abroad - in this regard, Australians are considered leaders, who can degas completely from horizontal drilling. We do not always apply such technologies. One thing is a shallow mine and quite another - such as the "Northern". The regulations state that air must be supplied to the mine at least 9 cubic meters per ton of production. But when the depths are large, a more intense air flow is required, this causes strong dustiness, which is also unsafe for humans. Nuances mass. Of course, as they say, “the best cure for dandruff is the guillotine,” and in our case, either closing the mine or investing huge amounts of money in security. That, in turn, makes coal "gold" and unprofitable. So we balance. I repeat once again: mining work is very dangerous, and people know it. In Soviet times, their relatively high wages were the very “risk premium”. Now, first of all, it is necessary to try to secure work as much as possible, especially in supercategory mines with a high methane content in coal seams. And if investments in security do not justify themselves, then eliminate such enterprises.

I am my main specialty mining engineer for the underground mining of coal deposits. Nevertheless, I once headed the fund, which was engaged in closing unprofitable, loss-making mines. We honestly worked it all - from 1993 on 2000 closed 200 mines in Kuzbass, Rostov region and other regions. In many respects, the coal industry was preserved precisely because we were liquidating unprofitable and dangerous production (in contrast to the same Ukrainians). Now 70% of Russian coal is mined by the open method. In a number of fields, conditions are still favorable for underground mining - there is no gas or its concentration is negligible, and the mine workings are well ventilated. Therefore, from the economic point of view, some underground enterprises are comparable with those who are mining open-pit mining. But there are not many of them. Usually, with the deepening of the mines, conditions worsen, gas appears, more and more tangible mountain pressure - and security needs money, money and money again. In open works, I note, too, everything is not so easy and simple. Layers can lie at an angle, when a large volume of rock is removed, then a so-called overburden appears and grows, and it is necessary to be able to handle it. But this, of course, is a different level of security and costs for it are significantly less.

- What place does Russia occupy now in the world in terms of the output of hard coal, brown coal and anthracite? How much does competition compel us?

- In terms of total production, we are approximately in the fifth place - about 370 million tons per year. China extracts about 3,6 billion 820 - 830 Million tons, they are on the heels of Indonesia, Australia, India - they have from 430 to 670 million tons. As for the quality of the composition, then approximately 80 - 90 Million tons in the volume of our production are brown coals, about 85 million tons - coking, the rest - coal-fired coal. Anthracites of the order of 7 million, they are mined in Novosibirsk on "Sibantratsit" and in the Rostov region - true, now only at "Satkin", the remaining mines are almost closed. The share of "Russian Coal" in the all-Russian volume is 14,3 million tons of annual production (4,5 million tons - coals, the rest are brown). A quarter of the output goes for export, the rest to the domestic market.

Due to the devaluation of the ruble, we now have a good advantage in the foreign market. But it can come to naught, as soon as we begin to update our equipment (it is 60% imported). The dollar for 30 rubles and for 65 - different money. We need to earn twice as much in order to maintain at least some balance. At the same time, I note that, in general, labor productivity in the Russian coal industry is five times less than in the Australian coal industry.

- You were a member of the working group on the refinement of the Energy Strategy of Russia for the period up to 2030. What are the long-term challenges and prospects for the coal industry? How have they been affected by the fall in world prices and the overall crisis?

- It is clear that coal exports are more profitable than supplies to the domestic market. In the post-Soviet years, when world coal prices went up, it constantly increased. From 2007 to 2009, there was some failure, then a new increase. However, from 2012 to the present day, world prices for these raw materials are falling. Anyway, from 2002 to 2012. only this export provided our industry with a gain due to high world prices, and now it is profitable due to the devaluation of the ruble. Naturally, we are working on the domestic market, the price there is also constantly growing, but strictly within the framework of slightly lower inflation. Profitability is very low, especially not unfold. What to do - the free market. Full price liberalization took place back in 1996, we have no state-owned companies in the coal industry. Due to exports, it was possible to maintain business interest in the industry and modernize production, build processing plants, etc. In the Soviet Union, the enrichment of steam coal was a serious problem; only coking coal was subjected to such processing. Now we sell enriched coal for the needs of the power industry of Europe, South Korea, Taiwan, China, Japan ...

The program, which we talked about, was extended to 2035. I, however, do not participate in the process of developing this document. I can only see that the document is constantly being adjusted, and in times of crisis, few people are ready to take full responsibility for its implementation. The program recorded a modest 400 million tons of coal production per year with today's 372 - the increment is insignificant. It is obvious that the export of coal, which is now in Russia at the level of 156 million tons, will nevertheless gradually increase. However, not the fastest pace, as prices have significantly decreased. However, due to the increase in production volumes, it is possible to at least reduce unit costs. Other exporting countries will also act. But infinitely so no one can do - neither we nor the Australians, nor the Chinese. And the domestic consumption of coal can not grow, in fact, almost no one believes it. The reasons for all are clear - this is the crisis, which inevitably reduces the volume of coal consumption, and the tightening of environmental requirements for the power industry. Anyway, the initial plans of our strategists to bring to 2035 year production to 500 million tons and exports to 250 million tons now do not look too realistic.

The epoch of industrial development of the world economy passed its peak. The technologies of steel smelting, production of iron ore raw materials and coke are changing. More and more scrap is used in smelting - a reusable metal. This amount of primary iron (which requires coke for smelting) is no longer required. In these conditions, the pace of coal mining slowed down even China, and clearly not on its own.

- How should Russia act against this background in order not to bring down its coal mining industry?

- I’ll say carefully: the best we can achieve is maintaining competitiveness on the world market in the marketing niches we’ve already mastered. About breakthroughs are not talking now. But even if we can hold on to our previous positions, in the end it will allow us to achieve a lot. Sooner or later, the price of coal, I think, will start to grow. Although today's 50 - 60 Dollars per ton of steam coal is also not the worst figure.

It is difficult to call favorable and the situation in the domestic market. It seems that the state in the energy strategy of the plans is huge, there are projects for the construction of coal-fired power plants. But for all those years that I'm participating in this work, there has never been a hope for an increase in energy consumption due to the construction of new coal blocks. There are unique stations - for example, the long-suffering and finally put into operation the third unit of Berezovskaya GRES, where coal is located at 13 km from the station and from the logistic point of view the use of this fuel becomes profitable. But in most cases, the cost of transporting coal by rail to the destination eats up all possible profits.

- Can the entry of foreign investors into the industry, which is being talked about so much, improve the situation?

- Frankly, I would not link too high expectations with them. Foreign investors are still very cautious approach to cooperation with Russia. This is not conducive to a whole range of problems: we do not have the best mining and geological conditions, extensive geography and complex logistics. It is not easy to understand the intricacies of laws and establish contacts with regional authorities. Which business will like this? Even in gold mining, foreign investors do not take their money at risk. And in the coal industry, the product is even more peculiar - it's hard to extract and sell ...

- And how do you assess the idea of ​​TORs in the Far East?

- In my opinion, the idea is theoretically correct, but practically impracticable. ТОР is good because the state gives the business a maximally favored regime. But this is not enough - we also need engineering infrastructure and much more. The budget will not pull such a load. One TORA does not raise state participation. And foreign and domestic investors in order to invest in this taiga, you need something more weighty than the warm assurances and honest eyes of government officials. It is very difficult to judge a project that has not really "breathed in" and started to bear fruit. When taxes and loan rates are actually lowered, when infrastructure appears - railways, airports, highways, then we'll see if these territories really "outstrip development" in the rest of the country. So far, the number of residents in the TOPs is very small.

- "Russian Coal" does not count for TOPs?

- In my opinion, there are no purely coal TORs in the Far East at all. We do not exclude our participation in any project if it is profitable and promising for us. But in this case we do not build such plans for the near future. In the Raychikhinsky District of the Amur Region, where we have been working for ten years at least, there will be enough resources for quiet work without deterioration in the quality characteristics of coal, plus there are quite a few areas that were worked out during Soviet times. Their resources allow the use of modern mining technology. There is also the Erkovetsky open-pit mine, there is a huge field with total reserves of about 3 billion tons. We are the only ones in this territory, and if the range of stable consumers of products expands, the opportunities for development are almost unlimited. The Blagoveshchensk CHP operates entirely on our Yerkovets coal, and the resources are fairly rigidly tailored to its needs - the supplies are focused exclusively on the Amur region. The project of joint construction of the Yerkovets hydroelectric station together with the Chinese partners was planned, but for the time being it is frozen

The Ogodzha deposit is closer to the TORs, where we own a small active site with reserves of 34 million tons. If there is a zone with tax and other privileges with time, it is possible that such a TOP will be interesting for us. While in those places there is no infrastructure, it is necessary to build 130-kilometer Railway, and this creates problems with the sale of products. Strictly speaking, even in the presence of railways, not everything is simple and easy: the economy of the final consumer is formed by the railway tariff established by RZD. In this sense, Amur coals are uncompetitive in the Trans-Baikal Territory or in the Maritime Territory: local raw materials of approximately the same quality, but are cheaper due to a lower transportation price. It turns out that all the Amur coal goes to the Amur Region, the Jewish Autonomous Region and the Khabarovsk Territory. Step left, step to the right - no options. And this "without options" is getting worse and worse. There are boundaries that we can not jump over. In addition, if a gas pipe arrives in any region, this also affects the volume of coal supply not for the better.

- Now it is much said that coal should be used not only in power engineering and metallurgy, apply methods of its deep processing, make oil products from it ... How do you look at the prospects for the development of coal chemistry in Russia?

- In the near future, in my opinion, it is not worth waiting for any particular progress in this direction. Yes, there is a technology for producing synthetic fuel from coal in the world for a long time - it is based on the method developed in 20-e Years of the twentieth century by Franz Fischer and Hans Tropsch. The Fischer-Tropsch process was actively used during the Second World War (it is no coincidence that Hitler began his campaign to Europe on tanks with gasoline engines, fuel for which was produced from coal by hydrogenation). After the war, the Soviet Union received this equipment as a reparation and based on it Irkutsknefteintez was built. But then the oil-and-gas-bearing western province was discovered, and the urgency of obtaining liquid hydrocarbons from coal fell away. The second such precedent in the world is South Africa, which was subject to an embargo on the sale of oil because of the policy of apartheid. There, too, they created production using the Fischer-Tropsch method and more than offset the needs of the state. But the fact is that for the construction of such plants, billions of dollars are required. For each 1 million tons of oil - about 10 billion dollars of capital investment. In Russia, in 79-x Years. Also tried to figure out whether we need a program for the development of the production of synthetic fuel from coal. They came across a lot of technical difficulties and the idea was eventually abandoned, and then the restructuring began and it was not until the technical revolutions. In the middle 2000-x To the idea returned and also everything died out. In the meantime, China launched its own production. Today it is clear that the technology of obtaining oil from coal is quite unstable and unreliable, it does not make much sense for Russia.

The remaining directions of coal chemistry (including the production of methanol from coal, etc.) are multiply more expensive than when using gas or oil. Therefore, I personally do not believe in the large-scale development of coal chemistry. Coal - a mass resource, it must be extracted and disposed of immediately. All other ideas to make from it kerosene, gasoline, a variety of chemicals, fertilizers are too expensive, invested funds and efforts do not justify.

-Investments in the social sphere of "regions of presence", in life-support of single-industry towns in mining towns, in environmental and educational programs, too, because they do not bring profit. The crisis forces to reduce such expenses. How do you intend to balance the necessary and possible?

- So it happened, and there's nothing to be done: a big business should always take on social responsibility. We do not intend to refuse such obligations. In three regions where our enterprises operate, we annually conclude agreements on cooperation with local authorities. We invest tens of millions in social programs, in the development of culture, sports, and education. In the same Raichihinsk recently on Shakhtar's day a concert was held (crowds of spectators went there from Blagoveshchensk). Restored indoor skating rink, which for ten years did not work ... Enumerate a long time. Yes, it's costs. But in another way, if you live and work on this land, you simply can not.

As for personnel programs, it is precisely such expenditure that is an investment in the future. We can proudly say that despite the difficult climate, people began to strive for us - for example, enterprises operating in Khakassia. Despite the fact that even out of the relatively prosperous Kemerovo region there is a serious outflow of personnel.

A separate issue is environmental responsibility. Carbon warehouses in nature, to put it mildly, do not ennoble. There are also "features of the national reluctance" to do something from the experience of Western countries - the same Spain. It's sometimes easier for a small company to pay a penalty than investing huge amounts of money in improving coal storage systems.

We are a large company, we are quite able to purchase good equipment, train qualified employees, debug the technology in accordance with modern world standards. And the products on the market also supply the highest quality. Will such investments pay off immediately? No, it will take a long time. Should we still do all of them to secure for ourselves an equally long-term advantage and clear prospects? Of course, yes.