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15 March, 2013  ▪  Nataliya Gumenyuk,  Sébastien Gobert,  Laurent Geslin

Digging for Billions

Who runs the illegal coal business in the Donbas
Gallery: The Illegal Mines (photos: 7)

An old Zhyguli is taking me and my French colleagues from Donetsk to Zuivka, a village near Khartsyzk. The radio is playing Voyage Voyage, a French pop song from the 80s. Slag heaps rise above the horizon. Coal-laden trucks pass by. “You want to see kopanky? (small illegal coalmines – Ed.). Just look around. They’re everywhere. Fifty emerged in our Zuivka in just one year,” one-time miner Mykola points at yet another mini-mine. The kopanka looks like a small hole in the ground with a wooden frame reinforcing the entrance. “Many state-owned mines have closed down so the people who live in mining villages had to earn a living somehow. In the past, people went under the ground to survive. They used some of the coal to heat their homes, and sold the rest. It’s a well-organized business now.” We slow down several times to let trucks pass. “You must be wondering how this works, with the business being illegal and trucks going back and forth in broad daylight”, Mykola asks ironically. “Just a year ago, they transported coal at night. They don’t have to hide anymore.”  

READ ALSO: Coal Wars 

A bus overtakes us near Khartsyzk. It is taking workers to the mines. “Coal is only 10 metres under the ground even in the Donetsk suburbs, but it is of little use. The system is as follows: one supervisor runs five-six mines. He reports to a boss who controls several dozen, and so on up to the top,” says Volodia, another Zuivka-born miner who worked in the mines for 30 years.

READ ALSO: Energy With No Alternative

We drive by a huge quarry, one of the biggest open mines in the region. Our guides insist that we do not get out of the car with our camera. Trucks are being filled with coal on the other side of the quarry. One truck holds an average of 40t. The drivers we talk to say that they make 20 round-trips a day. One ton of coal from the kopanky costs around UAH 500 (USD 60), so the value of the coal transported in one truck is UAH 400,000 or nearly USD 50,000 per day. Overall, the 7m t of coal mined in kopanky yearly accounts for 10% of total annual coal output in Ukraine.

Kopanky miners use primitive tools: spades and cables. The open quarry has modern equipment. According to mining machinery websites, the price of the cheapest excavator ranges from UAH 150,000 - 300,000, or USD 18,000 – 38,000. The rent of a good quality excavator is UAH 2,000 or about USD 250 per day. This cost is only affordable in industrial mining.

READ ALSO: The Ghosts of Industrial Past

FEAR AND DANGER IN THE DONBAS

In the mid-90s, the local miners went down into kopanky only to feed their families. Today, the work is considered profitable by local standards, bringing in up to UAH 7,000 a month. The wage depends on the profit made by the bosses, but it is still higher than the average UAH 4,250 or slightly over USD 500 earned by miners. According to village residents, 70 of more than 3,000 locals work at kopanky. They refuse point blank to talk to the press, not wishing to risk losing their jobs.

The higher than average income of kopanky miners is justified by the conditions they work in. Mining is considered to be one of the most hazardous jobs in Ukraine. According to the Job Safety and Emergencies Department of the Coal Industry Ministry, 4,000 people were injured and 155 killed in Ukrainian mines in 2011.

READ ALSO: How Europe Got to Know About Kopanky

There are no available statistics for accidents in kopanky. Only the ones with several fatalities at the same time get noticed, such as the accident near Tulpan village in November. The cable of a cart bringing up four miners from a closed section of the mine broke, killing three. Just one survived.

“There are problems with safety measures at both private and state mines, but they are catastrophic at kopanky. The tunnels are too narrow, they are too close to the surface, and the earth can collapse at any time,” says a rescuer, off-record. “Many professional miners work in kopanky. They know the risks but ignore the discipline. Colleagues won’t allow them to light a cigarette in an operating mine because it can cause an explosion. In kopanky, everyone smokes.”

Over the past year, Donetsk rescuers have started to get calls from kopanky on a regular basis. They do not complain: their main thing is to save lives. However, this could signal that someone is backing the illegal mining. “Nobody wants trouble. If worse comes to worst, the victims have to say that their injuries have nothing to do with the work in kopanky. They could say that they were in a car accident,” the rescuer explains.

Estonian filmmaker Marianna Kaat, the director of the Auk Nr.8 documentary, showed how miners, including children and women, risk their lives in illegal mines. She filmed the life of a family of orphans in Snizhne, a town in the Donetsk Oblast, over a period of two years. Yuriy, 14, worked in a kopanka to support his two sisters. Presented in spring 2012, Auk Nr.8 became popular in Europe and spread through Ukraine on the Internet. Interfilm, the Ukrainian co-producer, as the copyright holder, did not allow it to be premiered in Ukraine. According to human rights advocates, this was because it was afraid of the government, which did not want to ruin Ukraine’s reputation before Euro 2012. Now, virtually every local recommends the film “because it shows the truth” even though very few have access to the Internet there. After the film was shown, some kopanky were shut down in Snizhne, and Yura, the 14-year old miner who starred in it, was attacked by persons unknown, the locals add under their breath. For people in Zuivka, his experience is the key argument for not allowing journalists to take pictures and mention names. Quite a few feel threatened by coal speculators. Olha inherited a land plot from her mother who had worked in a kolkhoz. The kopanka next to her plot had been there for a while but extraction has now expanded to Olha’s land. She was recommended  to agree to the long-term lease of her land as soon as possible. “It was an offer that is impossible to refuse. They promised to pay me if I’m lucky. I’ll agree, but only for the sake of my family’s safety,” she explains, her voice trembling.

READ ALSO: Life Is Different There…

Counter to the widespread opinion, that local residents don’t mind having the kopanky in the neighbourhood, most do in fact. The income from coal comes virtually right from under their feet, yet the local budget gets zero funding. The mining ruins the landscape, making the land impossible to farm. However, farming is critical in villages where there are no jobs at all.

A WIN-WIN DEAL

“A few kopanky have been shut down, but the overall number has grown over the past four years,” says Oleksandr Ponomarenko who lives in Zuivka. “The authorities, both local and regional, are involved. The police once invited TV companies to shoot the “shutdown operation” that involved several arrests. Two days later, the mining was back on track.”  It was because of the ongoing struggle with the coal mafia that his father Mykola Ponomarenko, the then Zuivka Mayor, died in prison. “He managed to close all the kopanky and the quarry, even though illegal mine owners offered him bribes and insisted that in anycase, everything was under the control of the local police,” Oleksandr adds. “In April 2011, someone finally snuck a bribe into his car. He was arrested and allegedly died of a heart attack five months before the verdict.”  

“State-owned mines that don’t meet their extraction quota buy cheap kopanky coal to make up the difference,” explains Mykhailo Volynets, Head of the Independent Trade Union of Miners of Ukraine. “In addition to subsidies from the government, owners resell the coal to thermal power stations. Kopanka coal costs nearly UAH 500 per ton, which is half that of state-owned mine coal. Clients either don’t know this or prefer not to know. Just add another UAH 500 of government subsidies, and the “unprofitable” mine will make up to UAH 1,000 on every ton of coal.”  

READ ALSO: Camille Magnard: “Kryvorizhstal Is a Reflection of Contemporary Ukraine”

In 2012, the government paid out UAH 9.9bn in subsidies to coal mines. The amount forecasted for 2013 is UAH 7.8bn.

“All that is needed to stop large-scale mining in kopanky is to make the directors of state-owned mining companies’ report where the coal comes from. The lack of transparency is the root of all evil,” comments Vitaliy Syzov, a journalist at Novosti Donbasa (The Donbas News), one of the few independent publications in the region, who is investigating this issue.

FAMILY BUSINESS

There are many rumours about who really controls the illegal business. When we tried to ask brigade supervisors who they work for, they derisively mentioned Viktor Yanukovych’s older son Oleksandr and close ally Yuriy Ivaniushchenko. Over the past six months, two state-owned electricity providers, Donbasenergo and Tsentrenergo, have bought UAH 12bn-worth of coal from companies close to Oleksandr Yanukovych’s circle. According to Mykola Volynok, Head of the Independent Trade Union of Donbas Miners, this coal comes from kopanky.   

Several journalist investigations point out entities linked to Oleksandr Yanukovych that have already taken dominant positions in the coal mining sector. Serhiy Kuziara, advisor to an ex-Energy and Coal Industry Minister, once admitted that he always “discussed the prospects of coal mining with the managers of the Donbas Settlement and Financial Centre (DRFTs) and MAKO”, both companies controlled by the President’s son. Last June, the Chairman of the State Property Fund, Oleksandr Riabchenko, announced that the government intends to privatize the mines – sell them for UAH 1 each with a list of requirements for investors attached. The Family’s interest in this has already been noted.

READ ALSO: In Search of a Scam for Two

The current government keeps talking of plans to increase coal mining. This should reduce Ukraine’s dependence on Russian gas. In fact, this energy strategy boosts illegal coal mining in the Donbas. It has always had kopanky; their number multiplied in hard times, such as after WWII or in the mid-90s. Many of these were called family mines because they employed entire families; men, women and children who were small enough to get around the narrow tunnels. Neglected mining villages still have kopanky in backyards – for family needs. However, someone who extracts coal to sell it needs “protection”. Now, it looks like the days of family mines are almost over in the Donbas. They are to be replaced by an era of kopanky controlled by just one Family. 


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