As far as I know
the region lacked coal last year. Four million tons
had to be delivered to the region. What are you
planning to do to provide the region with local
coal?
The Primorsly Krai has huge pit/bituminous and brown
coal resources. Pit coal is mined and is of higher
quality. Its thermal capacity is two or three times
higher than that of brown coal. Pit coal is mined.
Brown coal is mainly open-cast mined.
The Krai has more than 2 billion tons of coal. Primorye
needs about 15 million tons annually. That is we
have supplies for many hundreds of years. Maximum
annual coal production was reached in 1987. 20.4
million tons was mined. Last year up to 10.5 million
tons of coal was mined. There were more than 30
thousand miners working in the Primorsky Krai 10-15
years ago. There were more than 40 coal mining and
auxiliary enterprises. Not all of them were profitable.
In the whole, the governmental policy and the government
decision to close particularly unprofitable and
dangerous mines were correct.
Unfortunately, when closing coal mining enterprises
not everything went correctly and successfully.
This concerns closed mines in the Primorsky Krai.
In our Krai 17 mines and 3 open-cast mines were
closed. Being a coal industry specialist, I am convinced
that not all coal mining enterprises must have been
closed. Though most of them were closed correctly.
I have been General Director since 1994. That time
31.4 thousand miners worked. At the moment one third
of that quantity is working in the coal industry.
The coal mining rate has been constantly growing
for these years.
I think it is a significant drawback of the Ministry
of Energy and the Primorsky Krai Administration
that they have not paid enough attention to providing
the Krai with solid fuel. If you have a look at
the map of the Krai, you will understand that from
different points of view it would be correct that
the Krai be provided with its own local coal.
No matter how good coal specialists are, they are
unable to solve this serious problem by themselves
without investments both from the federal government
and the region. We can be criticised for that we
could not, maybe, attract foreign investors' attention
to this problem.
Every year coal specialists tell objectively that
this money should not be given without return. These
investments are not necessary to pay salary, they
are necessary to buy new mining and transportation
equipment. Mining engineers, technical specialists
and workers are highly qualified in the Primorsky
Krai. The coal industry in Primorye was the second
to appear after the fishing industry. The coal industry
is more than 140 years old.
Before foreign investors decide to invest in
"PrimorskUgol", they would like to know
the financial situation of the company. Could you
give some financial figures, for example, profit
and turnover?
We had payroll debt for 8 months 2 - 3 years ago.
For the last 2 years we have not had salary payment
delays. For a year we have been paying advances
and salaries twice a month. We do not have problems
with tax payments. The total annual turnover is
up to 40 million dollars. Of course, we are not
a very big company in comparison with others.
As far as I know your company's share is about
30 % of the market in the krai. Is it true? How
are you trying to increase your share of the market?
This year we are planning to put into operation
the producing capacity for 100 thousand tons of
coal at the coal open-cast mine "Pavlovsky".
Last year we put into operation the additional producing
capacity for 100 thousand tons of coal at the coal
open-cast mine "Nezhinsky". We have started
constructing a new coal open-cast mine "Pribrezhny".
We are planning to increase pit coal mining at "Partizansky"
and "Lipovetsky" coal deposits and we
will do it for sure.
We are not talking about the government property.
We are planning to develop private property in the
coal mining sector. Being a monopolist, "PrimorskUgol"
has never impeded will not impede but on the contrary
will encourage/help to develop different types of
property. That is how both our engineers and technical
people and workers feel.
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Regarding your deposits
and possible work of new ones, are you going to
seek for investments or have you already been seeking?
What strategy do you use to look for investments
in the Primorsky krai?
We are trying to work with the help of our Russian
businessmen. At the moment we are working with Japan
and South Korea. We are also trying to interest
our near neighbour - North Korea. The have sent
their delegations to our company. If our far neighbour
shows interest to our company, we will be reliable
partners to them. Neither Russian nor foreign company
can accuse us of infringing our obligations. I am
deeply convinced "PrimorskUgol" is a reliable
partner for any company.
Talking about the future: some countries are
trying to use natural gas but at the same time there
are companies, for example "Rosneft",
that understand that coal is an important energy/power
source and the future is with coal. What is your
vision of "PrimorskUgol" in 10 years?
I agree that gasification is a step forward and
gas is better than coal. But unfortunately such
a huge country as Russia, having enormous coal supplies,
underestimates it. The coal share in power sector
is much higher in developed, civilised countries,
I mean the US, European countries and others, than
in Russia.
According to prospecting data, the world gas supplies
are less than coal ones. It is supposed that during
the coming decade the gas share will be decreasing
but the coal share in power sector will be growing.
Many people count on Sakhalin gas but Sakhalin oil
and gas will not get Primorye in the nearest 15
years When I analyse Sakhalin gas mining projects,
it seems to me that it will take two times longer
that 15 years. Though I hope in future Russia and
the Russian Far East will be engaged in gas issues
more actively.
However, having vast areas and lacking population,
neither Primorye nor the Russian Far East in general,
is not supplied with its own coal. Though there
are extremely huge coal supplies in the Russian
Far East. That is why promising politicians, big
regional directors and managers should bear it in
mind and develop the coal industry in order to provide
themselves and the Primorsky krai with its own,
cheaper solid fuel, namely with coal.
You have been working as General Director for
this company for 8 years. What was the most serious
problem you had to resolve? How did you do it?
1994 - 1998 were the most complicated years. That
was the time when the Russian coal industry re-structuring
began. The socialistic government spoiled miners
a little: Primorye's miners got 80% of their salaries
from every single ton of coal in 1995 from the government.
From my point of view and from the points of view
of many normal people it is not correct.
The government of Russia was unable to pay salary
to Primorye's miners. Being a director of the company,
I was also aware that it was not right. We, from
our side, did our best to help the government to
get rid of those crushing terms it had put itself
in front of miners. This regards not only our krai
but the whole Russia as well.
Sometimes "PrimorskUgol" failed to follow
all the orders coming from the Coal Ministry. We
counted on our own forces. We knew and were sure
that neither the Krai Administration nor the Ministry
of power nor the government of Russia would give
us enough help and it would be necessary to find
the way out independently.
Is the prosperity of "PrimorskUgol"
due to such an approach and re-structuring?
You are right. It is true. I can only add something:
the inter-departmental governmental commission on
coal mining regions of Russia and then the Ministry
itself gave an order to close a mine. Let us now
imagine the mine itself is unprofitable but one
section is profitable. We tried to prove that we
needed to keep the section. We were oppressed to
close it. We refused to do it and thus we managed
to keep 1,600 working places. We had a lot of such
problems, we saw them and tried to avoid them.
The years have passed and today we ca assure that
our counting on our own forces position was correct.
"PrimorskUgol" has been admitted and recognised
as one of the best coal mining companies in Russia.
As for the latest awards, I was recognised as the
Best Manager of Russia and I have become on of the
best 100 managers in industry and science.
What has been your best achievement for the last
2 years?
I have written a few professional books. I have
become Doctor of Technical Sciences. This year I
have become Professor of the Far Eastern State Technical
University. I am pleased with my two children. My
son is director of a coal mining company not under
my control. My daughter has a small business.
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