COMPANY INSIGHT

CASAR Rope Installation in Huainan

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Although China is the second largest coal-producing country in the world, the geological conditions of the country's coal seams are not always favorable. The coal seams in most of the existing coal-mining areas are too deep for surface mining so about 90% of China's total coal production is from underground mines.

About three years ago CASAR's mining sales and technical group began seeking a partner in the Chinese coal industry to test our special mining ropes. After several visits and technical evaluations on their winding system, Huainan Mining Industry Group, one of the largest mining groups in China, agreed to test our CASAR ropes at their Zhang Ji.

Installation CASAR Turboplast

Ukraine’s growing wage arrears

In the mining industry, shutting down equipment for a week to replace ropes is extremely costly. These maintenance breaks could take place every year which adversely affects the mine's profit.

It is a huge benefit to a mine to be able to run the machines longer between change-outs. Huainan Mining's target was to reach a rope lifetime that enables the mine to extend the time between scheduled rope change-outs to two or three years. When CASAR first met with them they could not reach year two on our conventional or competitor's ropes so they often changed ropes after one year to avoid an un-scheduled breakdown.

The installation of our CASAR Turboplast MF took place September 3-5. The 56.00mm diameter rope operating on a 4-rope, ground- mounted friction winder system replaced some flattened strand mining ropes.

These are the first CASAR Special Mining Ropes operating in China and the first mining ropes with a steel core operating in the Chinese coal mining industry.

This is a milestone achievement and, once successful, will open the doors to several other mines in Huainan and other mining groups.

The project was led by David Cai (Mining Sales Manager-China) and Alexander Fäh (Technical Sales Manager Mining). This was a great team effort!

It is a huge benefit to a mine to be able to run the machines longer between change-outs

During the first ten months of 2017, Ukraine spent $2.15bn on coal imports

Separatist complications

The wage arrears and other concerns have built up in the coal mining industry in Ukraine for a number of reasons. Allegations of corruption have been made by many, including Oleksandr Kharchenko, managing director at Energy Industry Research Center in Kiev. He claimed that the money from state-run mines has been redirected, which has been a key cause of the wage arrears.

Others claim that the deep nature of Ukrainian coal operations and low productivity of many mines has made them unprofitable; they have therefore been heavily dependent on government subsidies for years. The level of these subsidies has changed with each government, without great reform to the industry.

Communication failures between the MECI and state-run mining companies and unions have allowed the situation to reach the critical point it is at today.

“We urge the Ukrainian Government to re-launch social dialogue with the unions, and take effective measures to solve the problems affecting the coal industry,” said IndustriALL Global Union general secretary Valter Sanches in a letter to the Prime Minister of Ukraine. “We stand in solidarity with our affiliated trade unions and our fellow miners in the Ukraine and support their legitimate demands and necessary legal steps required to protect the rights of workers.”

Political and military upheaval has complicated the situation. In April 2014, pro-Russian separatists formed a militia that took Donetsk and Luhansk out of the Ukrainian Government’s control. In July 2017, they announced that they had founded a new country called Malorossiya, or Little Russia in English.

The four Selidivvugillya mines that have been striking this year lie very close to the eastern border with the People’s Republic of Donetsk, increasing the tension in the region. Many miners are concerned that due to unpaid wages they could not afford to move in an emergency, putting them and their families at risk.

Furthermore, 85 coal mines lie inside this disputed region. The resource-rich area accounted for 57% of production up until 2014, when reports stopped. Only 35 state-run mines are outside of this region, which must continue producing coal for domestic use. It is currently illegal to purchase coal from the separatist regions; however, there are reports that it is being sold to Russian, Polish and other European companies.

Since 2014, Ukraine has engaged in numerous coal import deals to make up for the lost supply created by the loss of territory. The majority of coal has been imported from Russia, which provided 55.7% - $1.2bn worth - between January and October 2017. The country has also begun importing American coal for the first time in its history, in particular anthracite, the price of which America has tripled since 2016. Overall, during the first ten months of 2017, Ukraine spent $2.15bn on coal imports.

With the significant challenges caused by the separatist movements drawing focus, many miners feel ignored by the government. As government officials in Kiev try to limit illegally sold coal and avoid an energy crisis, communication has broken down with the remaining coal miners.

A time for communication

Ukrainian state mines currently employ 51,000 workers, and are the main source of employment in regions such as the Donetsk coal basin. Mine closures over the last few years have already decimated towns and the government does not desire to close more but there is little clarity on how to progress in a profitable and sustainable way.

“The development of state-owned mines is possible in a stable environment, but wages must be paid on time,” said Trade Union of Coal Industry Workers of Ukraine deputy chair Valery Mamchenko. “Last year, UAH2.8bn ($100m) was allocated for the development of the coal industry, including the wage fund, but this year the amount is less than half.”

Without communication with unions and workers, many fear that Ukraine’s coal mining industry will remain stuck in its cycle of non-payment, protests and emergency measures. “It is essential to pay wage arrears in full; stamp out corruption in the industry; appoint managers of enterprises and mines on merit alone; and establish an effective social dialogue with trade unions,” said the Independent Trade Union of Miners of Ukraine president Mychailo Volynets.

The next few years will determine the future of Ukraine’s mining industry; now is the time for the government to focus on and support coal communities. Whether or not mining is to continue to play an important part in Ukraine’s economy and the lives of its citizens, or if it is time for the subsidies to be reduced and new energy industries to be grown, a plan must be made.

Ukrainian state mines currently employ 51,000 workers, and are the main source of employment in regions such as the Donetsk coal basin. Mine closures over the last few years have already decimated towns and the government does not desire to close more but there is little clarity on how to progress in a profitable and sustainable way.

“The development of state-owned mines is possible in a stable environment, but wages must be paid on time,” said Trade Union of Coal Industry Workers of Ukraine deputy chair Valery Mamchenko. “Last year, UAH2.8bn ($100m) was allocated for the development of the coal industry, including the wage fund, but this year the amount is less than half.”

Without communication with unions and workers, many fear that Ukraine’s coal mining industry will remain stuck in its cycle of non-payment, protests and emergency measures. “It is essential to pay wage arrears in full; stamp out corruption in the industry; appoint managers of enterprises and mines on merit alone; and establish an effective social dialogue with trade unions,” said the Independent Trade Union of Miners of Ukraine president Mychailo Volynets.

The next few years will determine the future of Ukraine’s mining industry; now is the time for the government to focus on and support coal communities. Whether or not mining is to continue to play an important part in Ukraine’s economy and the lives of its citizens, or if it is time for the subsidies to be reduced and new energy industries to be grown, a plan must be made.

It is essential to pay wage arrears in full [and] stamp out corruption in the industry