To understand what JSC HC SDS-Ugol really is, we have to remember how this mega-corporation was established both within one region and within all of Russia. Mikhail Yurievich Fedyaev is a Russian entrepreneur and senior executive. He is one of the founders of the Sibirskiy Delovoy Souz holding company (Siberian Business Union), and its president since 2007.

Starting with the 1990s, he's been a business man and head of many commercial companies. As the head of the Kemerovo chapter of the Mirinvest company, he met Vladimir Gridin, his future business partner. At the end of 1999, they took control of Chernigovets, an open-pit mine. After this, Mikhail Fedyaev and Vladimir Gridin started a group corporation called Siberian Business Union. It was registered in 2004. Its structure includes a number of rapidly developing assets in various sectors of economy.

Siberian Business Union holding company’s corporate management is conducted via branch holding companies: OAO HK SDS—Ugol (HC SDS—Ugol JSC), OAO HK SDS—Mash (HC SDS—Mash JSC), OOO SDS—Stroy (SDS—Stroy LLC), OAO HK SDS—Alko (HC SDS—Alko JSC), OOO SDS Mediaholding (SDS Mediaholding LLC), OOO HK SDS—Energo (HK SDS—Energo LLC), OAO SDS—Azot (SDS Azot JSC).

This table includes all the companies that are, or were, part of the SDS holding company. It was them that made Mikhail Fedyaev an incredibly wealthy man. Please pay attention to the companies that are highlighted in green. Those are the companies that are directly connected with the underground fire in Kiselyovsk, near Parnikovaya street. Also, you might have noticed that the list contains the Listvyazhnaya mine - the location of the explosion that happened on 25 November and killed 51 people.

Since 2018, the owners of HC SDS-Ugol sold a large part of the holding company’s assets. In 2015, SDS sold 74.99% of Novotrans's shares to businessman Konstantin Goncharov. In 2016, Roman Trotsenko’s AEON Corporation purchased SDS Azot, a producer of nitrogen fertilizers, while the Novaport holding, co-owned by Trotsenko, purchased Kemerovo’s airport. Trotsento has been called a friendly partner of Fedyaev by the media. AEON’s owner stated last November that he was ready to invest up to 50 billion rubles (about $671.2 million); part of the investment was supposed to be made in coal extraction. When talking about coal projects, he means development of SDS-Ugol.

Vladimir Gridin decided to quit the business and sell his share to his long-time partner and the company’s co-owner Mikhail Fedyaev. According to some sources, Gridin stopped controlling the holding and its assets a long time ago. “He spends most of his time in Europe and dreams of retirement,” says an interviewee of RBK. According to the SPARK database (2004 data), Gridin and his sons owned 66.67% of the SDS holding, while the remaining 33.33% belonged to Fedyaev.

The territory where the Parnikovaya underground fire started is located near the Kiselevskaya mine’s mining field. The fact that coal extraction at that mine was conducted by HC SDS was mentioned in the second collection of articles from the 4th interregional scientific and practical conference with international participation (2011). In particular, it stated that in 2009:

SDS companies’ share in coal extraction was 14%. SDS-Ugol incorporated the Kiselevskaya and Salek mines, as well as Kiselevsky and Prokopyevsky open-pit mines. Labor productivity of those enterprises was fairly low. For example, for the Kiselevskaya mine it’s 29.1 tons per man in a year (9.63% of the average labor productivity) – one of the lowest in the region. Meanwhile, the high labor productivity (224.71%) in the Prokopyevsky open-pit mine was achieved by reducing the number of workers: 9 workers were employed in the open-pit mine’s principal activities in 2010. Despite low labor productivity, the SDS enterprises have high profit margins: the difference between the sale price per ton of coal and the production costs is 551.5 rubles (about $19) per ton (25.08% of the price).

Enterprises belonging to the SDS holding company work under conditions that are less favorable for coal extraction. Large production costs, as well as insufficient levels of safety in the region’s enterprises made it necessary to switch to open coal mining.

 (Page 17, appendix 1)

It turns out that at the time when citizens filed their first complaints about the underground fire, the SDS holding company was responsible for the territory. As we know, the holding company made no effort to find out the causes of the fire, or to ensure safety of the people who lived nearby.

As mentioned in second collection of articles from the 4th interregional scientific and practical conference with international participation (2011), , the Kiselevskaya mine’s productivity was extremely low: 29.1 tons per man in a year (9.63% of the average labor productivity) – it was among the lowest in the region. Most likely, this was the reason why in 2014 OOO Shakhta Kiselevskaya (Kiselevskaya Mine LLC), part of the JSC HC SDS-Ugol, was declared bankrupt. On 17 April, this ruling was made by the Arbitration Court of Kemerovo Oblast; the claimant was OOO Inskoy Ugol (Inskoy Ugol LLC). Bankruptcy proceedings at the mine were introduced for six months; Irina Rakitina was assigned as the bankruptcy commissioner. By the time Inskoy Ugol’s claim was reviewed by the court, OOO Shakhta Kiselevskaya (Kiselevskaya Mine LLC)’s voluntary dissolution was already underway. The Kiselevskaya mine, built back in 1935, ceased extracting coal last fall; the staff was fired by agreement of the parties or transferred to other enterprises of SDS-Ugol. The mine used to extract the thermal coal branded G (medium volatile coal). When the Kiselevskaya mine was shut down, the underground extraction in Kiselyovsk ceased completely.

After this, interesting things began to happen. An EXTRACT from the Unified State Register of Legal Entities, hosted by the Federal Taxation Service of Russia (see the appendix on the Kiselevskaya mine) states that, in 2017, a man named Vitali Lisovoy became the owner of OOO Shakhta Kiselevskaya (Kiselevskaya Mine LLC). At the same time, the underground fire is still going near Parnikovaya street. No action has been taken.

On 30 May 2019, when the entire world was talking about the underground fire, the city administration of Kiselyovsk (represented by the head of a department of Municipal Property Management Committee) signed an agreement with a man named A.V. Krom, the director of the company called OOO Rudnik (Rudnik LLC). Under the contract, the areas with the mining field were to be transferred to OOO Rudnik (see the appendix on OOO Rudnik). There’s absolutely no information on how the mining lands suddenly came to be owned by the city. One thing is clear: despite Kiselevskaya mine’s bankruptcy, as well as the fact that SDS-Ugol used to extract coal there, no efforts were made by SDS-Ugol to establish the causes behind the underground fire or to ensure safety of the people living nearby. It needs to be noted that the Kiselevskaya mine became SDS Ugol’s property in 2003, and citizens started complaining about the underground fire in 2004!

After the whole world learned about the underground fire, guards were assigned to watch over the territory. The employees of the security company always try to stop people from accessing the territory with abnormal temperature indications. While doing so, they present a document received from the Federal Service for Environmental, Technological and Nuclear Supervision (Rostekhnadzor) which states that people are not supposed to be on that land lot, as it is a dangerous manufacturing site due to its proximity to the Kiselevskaya mine. (see the Dangerous Object appendix), issued by OOO Sibenergougol (Sibenergougol LLC), whose owner is currently OOO MELTEK (MELTEK LLC). (see the appendix on Sibenergougol)

There is also a contract under which this territory is merely shared between the enterprises owned by SDS Ugol. It’s very similar to the long-established scheme used by coal companies in Russia to evade their duties to revegetate and restore lands. (see the appendix: Agreement_on_KEM_No_01827_TE.pdf)

Strangely enough, in 2017 the head of OOO Rudnik felt a burning desire to rent the mining field of the Kiselevskaya mine. It was a very strange request, seeing that revegetation is expensive. To understand why OOO Rudnik decided to shoulder such huge financial responsibility, we’ll have to study what the KEM No.01827 TE license is.

The Russian United Register of Geological Information (EFGI) states that:

Protocol 4862 of a State Committee for Mineral Reserves session (9 December 2016) to review materials to approve the conclusion of state experts on feasibility study of permanent prospecting conditions and estimation of coal reserves on the Kiselevskaya mine’s area (license: KEM No.01827 TE), part of the Kiselyovsk coal deposits in the Kemerovo Oblast. (In addition to the report by Dvurechensky S.G., inventory number 526732)

It means that there is coal (A LOT of coal) in that area, and you always have to do prospecting work. This is how millions of tons of coal are extracted in Kuzbass under the guise of “revegetating the land while mining coal at the same time”.

However, the same source states that this area of the mine Kiselevskaya is supposedly an addition to the main deposits that are located in Prokopyevsk, as well as around the Bungursky village. However, if we dig deeper into the situation, things get even more interesting. We can remember that back in 2017 a man named V. Lisovoy was added to the tax receipt of OOO Shakhta Kiselevskaya as its new owner. All the related materials in the media state that in 2013 the mine was still extracting coal, it was working as part of SDS-Ugol, and it belonged to SDS since 2003.

However, there is one more surprising thing.

In 2013, the Kommersant newpaper reported the following:

Subsurface Management Department of Kemerovo Oblast (Kuzbassnedra) conducted several bids for coal mining land lots. Nobody expected that the 8 Marta coal deposits in Prokopyevsk would cause such long fights. As Inna Pakh, the vice-chairman of the auction committee declared at the auction, the deposits include only predicted resources (belonging to the P1 category according to the state of geological exploration) in 5.2 million tons of regular lean coal. The land lot is located where the mining lease of the Krasny Uglekop (Read Coal Digger) mine used to be. This was the mine that “fractured the land lot’s surface”. The starting price for the production license was merely 1.3 million rubles. The land also contains dilapidated housing that is slated for demolition. However, it is conveniently located in the district with developed mining industry. The 8 Marta lot is adjacent to three mines and two open-pit mines. A railroad is 3 kilometers away from it; the Novokuznetsk Airport is 4 km away.

Two companies belonging to SDS Ugol placed their bids (the third largest producer of coal in the region): ZAO Prokopyevsky Ugolny Razrez (Prokopyevsky Open-Pit Coal Mine CJSC) and OOO Razrez Kiselyovsky (Kiselyovsky Open-Pit Mine LLC) According to Kommersant, in March during Kemerovo Oblast Administration meeting Mikhail Fedyaev talked about the holding company’s intention to acquire new land lots, including the 8 Marta one, to replace the mines in Prokopyevsk that were controlled by SDS and were in the process of being closed.

This is interesting if you consider that both the Prokopyevsky and the Kiselyovsky open-pit coal mines were part of SDS-Ugol. In other words, the whole supposed fight for the license was merely a “family affair”.

Now, let’s get back to the Listvyazhnaya mine disaster. There, an explosion killed 51 people. There’s plenty articles on the Internet about how exactly coal was extracted at that mine. It was extracted with horrifying safety violations.

Investigators claim that the disaster was caused by a “gas-dynamic phenomenon”: a fire at a depth of 250 meters resulted in an explosion. 51 people, including 5 rescuers, died. All in all, there were 285 people underground.

Soon after the explosion, TASS wrote, citing an unnamed source, that there are no records of maximum permissible concentration of explosive methane being exceeded in the Listvyazhnaya mine before the accident. However, widows of dead miners claim otherwise.

“The methane levels were off the charts, it was well known,” said Inna Piyalkina, widow of the miner Boris Piyalkin, while talking to journalists. “Every time my husband came home from work, he was telling me that it was not going to end well. The levels were so far off the charts that all the sensors were beeping all the time. During the night of November 14 to 15 there was a longwall fire. And here’s the result. 10 days went by – and everyone was dead.”

Denis Timokhin is one of the few surviving miners; he agreed to talk to journalists. “Safety regulations were not observed at all at Listvyazhnaya,” he  said to Taiga.info. “When the [concentration] of methane is 1.5%, everything is supposed to shut down. When it’s 2%, the mining machine is supposed to shut down automatically. Partitions were installed so that the mine’s equipment would continue working despite exceeded limits. The occupational safety service just let it slide. When labor inspection came by, they stopped the entire longwall mining operation. And everything was fine, as if the longwall just great. But they never came by when the longwall was on the move. When I was working on the longwall, the concentration was 4%. I felt terrible. I used to go outside, get a short breath of fresh air, and then get back inside.”

A few hours after the tragedy, voice messages made by survivors after the tragedy started appearing on the Internet, including on the VK social network’s Kuzbass Incident community Current Time TV managed to receive a confirmation of their authenticity from one of the miners.

Such disregard for lives and well-being of miners on the part of SDS-Ugol is caused by the company’s desire to save money and squeeze as much profit from coal mining as possible. It’s worth taking a closer look at the income of SDS-Ugol, including the Listvyazhnaya mine.

The Za Chestnyi Biznes (English: “We Stand for Honest Business”) web portal publishes income-related data for 2020, a year of COVID when coal mining companies were not doing too well.

“Siberian Business Union” HC (SDS)

The Listvyazhnaya coal mine

Mr. Fedyaev himself is doing just fine, though. According to Forbes, the wealth of Mr. Fedyaev as of 2019 was estimated to be 600 million dollars, making him 173th in the Russia’s 200 Richest People list.

In 2019, the Listvyazhnaya mine generated good income for its owner. The year 2020 was not so successful due to the COVID pandemic; this is, however, no good reason to skimp on workers’ safety. Such attempts to save money were the cause of the gas-dynamic phenomenon which, in turn, led to smoke filling up the air gate of section four, suffocating the miners to death. Criminal proceedings were instituted against inspectors of the Belovsky territorial department of the Siberian department of Rostekhnadzor. The charge was: negligence with grave consequences. The mine was examined by Mr. Trokhman, a Rostekhnadzor inspector. There is a possibility that the relationship between the holding company’s board and the supervising body might involve corruption.

A 2021 inspection by Rostekhnadzor’s territorial department found almost 140 violations in how the Listvyazhnaya mine’s work is organized. On Thursday, 11 people died at the mine due to a fire, while 46 were injured. According to the united register of inspections, various violations were discovered in systems of air ventilation and early response to fires.

According to the register available on The Prosecutor General's Office of the Russian Federation’s website, the mine underwent 9 inspections in 2021 - by various bodies, from the Ministry of Emergency Situations of Russia to the Prosecutor’s Office. Rostekhnadzor found 139 violations during the inspection it conducted in April, including fire safety violations. Among these violations are: “absence of sensors to detect early signs of fire (oxocarbon monitors) in the air gate 823 (which is where the fire started, according to TASS) behind partitions; for the mines that mine self-igniting coal beds, the ventilation structure doors were out of order.

The last inspection (by building supervision authorities) was conducted on Wednesday, 24 November. As various media and Telegram channels stated earlier, no violations were found on that stage. The Kuzbass Ministry of Construction stated to TASS that the inspection was unscheduled, but it took place on the surface. Facilities, housing and water treatment systems were inspected - they all have nothing to do with the incident on the mine.

To sum this information up, let’s stress several points:

1. JSC HC SDS-Ugol has years of history of ignoring not only dangerous situations at its own enterprises, but also the dangers that these enterprises pose for local residents.
2. For many years, SDS-Ugol has been avoiding responsibility and failing to comply with regulations by oversight bodies.
3. SDS-Ugol sells blood coal that was mined while violating human rights for safe environment, life and decent work.
4. SDS-Ugol is directly connected both with the explosion at the Listvyazhnaya mine and with the underground fire in Kiselyovsk near Parnikovaya street, the location of the mine field of what used to be the Kiselevskaya mine. One man stands behind all of these tragedies: Mikhail Fedyaev, a coal oligarch who has zero regard for the lives of his workers and of regular people. This include children who live near the fire in Kiselyovsk.
5. Enterprises belonging to JSC HC SDS-Ugol lead both the media and local residents astray, deceiving them about environmental safety. Mr. Rudakov, head of the Mayskoye Mine Office (part of the JSC HC SDS-Ugol), had this to say to the Novosti Kiselyovska media outlet (see the Mussorka appendix):

The examination revealed that a segment of the earth’s surface was heated, and that there was smoke in the vicinity of the Malinny Lane, beyond the mining leases of the Krasnobrodsky open pit coal mine (Vakhrushevskoye field) and OOO Sibenergougol (Sibenergougol LLC) (the Kiselevskaya mine). At the request of the Kiselyovsk city administration, the aforementioned enterprises eliminated the source of the heat by dismantling the landfill, excavating the source of high temperature and covering that spot with argillaceous materials.

Also, Mr. Rudakov refused to provide any environmental information, stating that such information constitutes a commercial secret. (see the Information about the State of the Environment appendix)

It’s no surprise at all that the “Kiselyovsk Canadians” failed to get resettled. After all, the crooked business of JSC HC SDS-Ugol has been supported by the state, as Pavel Fedyaev, one of Mikhail Fedyaev’s sons, is a Member of the State Duma since 2011.

Translation by Nikolay Gorelov

Agreement_on_KEM_No_01827_TE.pdf

Annex_1.pdf

Dangerous_object.pdf

Information_about_the_state_of_the_environment.pdf

OOO_Rudnik.pdf

Mussorka.pdf

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