JSco “Siberian Coal Energy Company” (SUEK) is one of the biggest coal companies in Russia and one of leading coal-energy companies in the world, which is one of the five biggest coal suppliers on the world market selling raw to 48 countries, including via its Swiss trading company SCEC AG. The enterprise has reserves of 7,5 billion tons of coal. In 2020 production amounted to 101,2 million tons (1\4 of total production in Russia). Coal mining takes place in 19 open pit mining and 8 mines. The “SCEC” owns a large energy generating company “Siberian Generating Company” (SGC); its assets include 27 power stations and a sales network.
Owner. 92,2% of the “SUEK” JSco belongs to a Cypriot company AIM Capital SE, which belongs to an odious Russian oligarch Andrey Melnichenko (his wealth amounts to 19,3 bln USD) who is known to be the owner of one of the most expensive super yachts in the world price of which is $447 mln.
Andrey Melnichenko
Annual expenses for the yacht maintenance amounts to $20 mln. The oligarch can afford this very expensive toy at the expense of the level of salaries (among other misuses) to miners in the SCEC which is extremely low (about $700-800).
The future coal tycoon started his career organizing currency exchangers in the markets of Moscow, later with participation and support of oligarchs Deripaska and Abramovich he organized the MDM Bank, organized raider takeovers (the biggest was the merger of the “Conversebank” which had served the nuclear field of Russia and taking-over of the company “Krasnoiarskcoal”.
Tax Evasion Schemes. The volume of taxes paid by the head company as well as the total financial results of the “SUEK” JSco do not correspond to the production size showings of the company. In 2019 net profit of the company amounted to 54 billion of rubles (income -137 billion of rubles). Next year having income of 144 billion rubles, the company showed loss of 4 billion rubles while sales return increased to 7% against 6.9% in the previous year.
The biggest coal mining asset of the company - the “SUEK-Kuzbass” JSco shows chronical unprofitableness. In 2020 the net loss made up 20 billion rubles, and the previous year – 6,7 billion rubles.
Violation of Technological Process. The RF business specifics enables to significantly increase efficiency of coal mining regularly violating regulations of labor safety, environmental standards and technological process. High level corruption in the country makes it possible to escape responsibility for the losses and damages done. Big companies belonging to oligarchs affiliated with the political leaders of Russia are actually out of the state control. The “SUEK” JSco is one the companies.
One of the accidents worth of mentioning was dump collapse in the open pit mining “Zarechni” and “Taldinski” on April1, 2015. As a result, power line piers were damaged due to which the open pit mining had to stop working, vehicles and warehouse were damaged, railway access road and the river Kirgai bed were blocked.
The Siberian administration of the federal agency for environmental, technological and nuclear supervision (Rosstechnadzor) during its regular on-site check of the “SUEK”JSco in summer of 2021 revealed more than 1000! violations of requirements in the industrial safety. The most serious violations are observed in the dangerous zones when carrying out works in the open pit mining: no design documentation kept, safety rules ignored when making explosions and many more facts endangering people’s health and life.
Earlier, on July 21,2020 examination of industrial safety was carried out in the Kirov mine of the “SUEK-Kuzbass” JSco (leninsk-Kuznetsk of Kemerovo Oblast). Among the violations revealed are release of methane from the mine workings in explosive concentration – 6,6% while the standard is 2%). Besides, the mine degassing device was broken and did work. Analogous violations were fixed on October 29 in the mine “Komsomolets”, where methane concentration was 8%. And, works had been carried out while the explosion barrier was absent and the mine degassing device was not functioning, and there were 138 miners in the mine whose lives were endangered.
Apart of the said, explosions in the open pit mining create danger for the population. Because of violation of the permitted power capacity of the explosive material used, air is polluted and houses of local people are damaged; movement and disposal of giant rock dumps create threat of man-made earthquakes like the one in 2013 in the Bachatsk open pit mining (Kemerovo Oblast) when earthquake tremors reached 7 scores in the epicenter with the magnitude of 6,1. During this earthquake more than 500 houses were damaged and local people did not get compensation corresponding to the damage.
Environmental damage. The “SUEK” is managed by Stepan Soljhenitsin, son of the Nobel literature prize laureate Alexander Soljhenitsin. He is a specialist in the field of environment but still insists on use of Siberian brown coal, while coal is denied by European countries to evade the hot-house effect.
Absolutely egregious are forms of violation of dust-gas mode when working in the open pit mining and it is regarded as genocide by the local population. There is an unseen pollution of air and water, huge damage done to the flora da fauna in the regions where the “SUEK” JSco extracts coal. For the populated points subjected to harmful influence high level of depopulation, high mortality and huge growth of oncological and other dangerous diseases especially, among children, are typical.
Burning mining dumps are the most severe problem as currently there is no fire extinguishing technology on the sites. For example, in the capital of Hakassi, Abakan air pollution level was 80 mkg\m3 from October 25 to 31, 2021. According to Russian norms the permitted concentration of dust is 35mkg\m3 while WHO recommendation is 25mkg\m3. The source of the disaster was the dump tails of the open pit mining “Chernogorsk” belonging to “SCEC-Hakassi” Ltd.
“SUEK” is famous for its regular violations of the land legislation. A typical example: on September 23, 2020 for a repeated failure to comply with the injunction issued by a controlling agency the “SUEK-Kuzbass” JSco was fined 250 thousand rubles for not re-cultivated 27 hectares of land. The system of penalties existing in Russia actually encourages land-users not to comply with requirements of regulations as penalties make tenth and hundredth part of the percent of expenses needed to carry out works for re-cultivation of soil.
Involvement in Corruption and Crime. Coal extraction is one of the most criminalized businesses in Russia. Since 90-ies organized crime groups have been carrying out fight for control over the enterprises in this field. It can be explained, coal gives big enough income in foreign currency, taxes are artificially understated, the state is generously subsiding coal transportation by railway. Apart of that, there is an opportunity of contraband export (volumes of production and exportation are shown artificially reduced). Delivery is carried out by grey schemes through the territories occupied by Russia Abkhazia and Donbass.
The “SUEK” is a company known for its skills “to fix any problem with the government”. Actually, we are speaking about systematic corruption among functionaries who are covering numerous violations by land-users.
A typical case took place in 2013 in the Ialevskoi mine (Kotino, Kemerovo oblast) which belongs to the “SUEK-Kuzbass” JSco. On January 7 there was an accident in the mine, worked rocks collapsed and an electrician was killed under the rock dumps. The mine was stopped formally, there were works carried out to clear and strengthen the area. On January 19 the works were started illegally, the drift was working and it lasted a whole shaft, several working processes were carried out at a time. On January 20 a methane explosion took place and 8 persons were killed.
Aman Tuleev, governor of the Kemerovo Oblast took part personally to cover up the tracks. The head of the region as the head of the accident liquidation headquarters in his TV speech said that no extraction works had been carried out in the mine (in fact, the drift was working…) and the mine is technically provided with needed devices (in fact, there are no high technological safety devices but the GPS which are built-in head lamps, which enables to trace workers in the mines).
The investigation carried out by the “Rostechnadzor” revealed facts of systematic violations of technical safety rules. In particular, explosion barriers had been blocked meaningly, that enabled to carry out works in the absence of ventilation system working and under high concentration of methane. Despite the facts of criminal negligence revealed, which entailed death of 10 persons during the accident and after the accident works. Criminal responsibility was placed on the switchmen – a mining master and a mechanic; these two received symbolic punishments (a year and two years, correspondingly, of conditional imprisonment).
Having support from the power, actually no public hearings are organized while no similar large scale project can be realized in RF without, not to mention journalists, HR defenders and environmental activists who are not admitted at all, sometimes with the use of force.
Protests of Population. Hakassi is one of the poorest regions in Russia where the most wide-scale protests took place against the barbarian production of coal. In august of 2019 an Hakassi people extraordinary congress characterized the “SUEK” JSco activities on the territory of the republic as a coal occupation regime. Representatives of the civil society had been initiating a referendum on moratorium on coal extraction in the region many times but their initiative had been blocked by means of political repressions from the administration of the Hakassi. Even the head of the region Konovalov, who is a communist and represents opposition, failed to change the situation. Activists are permanently under pressure by certain criminal elements, low-enforcement agencies, court prosecution.
The protesters activities against the “SUEK” JSco are still going on only in the towns as population of these towns suffer most from the barbarian coal production in the region.
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