Source of information: http://www.unece.org/se/pdfs/coal8/csd2feb06/Topic8/Ukraine.pdf
Retrospective and present-day analysis of world coal production as well as its
consumptions demonstrates that coal has been and remains the principal power
resource its role in fuel and power-generating complex is constantly growing.
This conclusion is very important for Ukraine that possesses large coal reserves
with the practical lack of petroleum and gas systems.
It is well-known there is no organic raw material alternative for coal in coke
production, the integral part of metallurgy.
Coal is an indispensable raw material for various chemical product
manufacture while potential of its technological treatment allows to use it for
gaseous and liquid fuel production.
The above witnesses of the fact that coal industry as the basic industry of any
advanced production region predetermines not only its fuel and power
generation state and development but national economy course as a whole.
There are some background positions determining the outlook of Ukrainian
mining facilities in the process of the branch restructuring, and namely:
-coal industry of Ukraine is the basic branch of economy having strategic
importance for the life of the country;
-balance and industrial resources of coal at operating mines and prospected
areas are sufficient not only to maintain coal output at its modern level but
to increase it substantially to provide further functioning of coal industry for
long term;
-the variety of mined coal ranks and features allows to satisfy the demand of
both metallurgical industry in coking coal and power generation branch in
steam coal;
-coal industry due to its capital consumptive character fails to function and
develop at the account of its mining enterprise only thus requires state
financing in the extent needed and sufficient for mine facilities
modernization.
All these preconditions allow to determine the main task of Ukrainian coal
industry restructuring as follows: to create the profitable branch operating on
the principle of mining enterprises work without losses for maximal
satisfaction of the state requirement in specified coal ranks and parameters.
To determine the accessibility of the task as well as to get necessary forecast
data it would be expedient to use general principles and approaches typical for
program and target forecast. The formal mechanism of such forecast
development includes analysis and evaluation of the existing status of the
subject under consideration as well as development of ways and media for the
put target achievement in the foreseen period.
Last year it was not once that management of DONUGI attracted attention of
various meetings members at the problems that have accumulated in the recent
years in coal industry of Ukraine that impede the national satisfaction of
demand in coal for the developing economy of the country.
Poor status of the industry can be explained by the number of either objective
or subjective factors. As for objective factors they include geologic conditions
of coal mining that are getting more and more complicated, low technologic
level of national coal mining enterprises, high extent of physical and moral
wear of main facilities and first of all, stationery equipment. Subjective ones
are associated with the limitation of investment resources, the low effectiveness
of the branch management system in 2002-2005, and incomplete structural
changes, besides, the absence of market mechanism of price formation for coal
products and the presence of the intermediary that came to the market to deal
between mines and mining equipment producers for its own prices.
The analysis of mining work and production at operating enterprise has
discovered the fact that the modern status of Ukrainian mining facilities does
not satisfy the requirement of the task.
As you know, due to specific character of coal mines operation including
permanent changes in the time and space of mining works conditions their
effective activity and satisfactory technical and economic data can be only
possible provided the coalmines are in permanent reconstruction. The optimal
period shall not exceed 20 years for the mines extracting flat seams, and 10
years for vertical seams correspondingly. But there is neither reconstruction of
operating mines nor new construction.
Thus the mining facilities of Ukraine go through their poor state being the
oldest ones among coal mining regions CIS. Today it is only 14 mines or 8.5
per cent that are less than 30 old, 73 mines or 44.5 per cent are in the age
between 30 and 50 years old while the operation life of 77 mines or 47 per cent
exceeds 50 years including 36 mines or 21.9 per cent that are older than
70 years. Besides, in Central Donbass there are 7 mines which operation life is
more than 100 years.
The lack of reconstruction does not allow to renew the state of a mine that
makes impossible any compensation of geologic and mining conditions
deteriorating with the dept of coal-seams under extraction.
At the same time 82 mines have the depth of mining operations in excess of
700 m including 29 of 1,000 m while in 42 mines the typical depth is between
500 and 700 m. Such substantial difference between the depth of mining works
and the level of transport roadways leads to stepped transport systems,
equipment break-downs and other negative phenomena.
There are 60.5 per cent of mines that are recognized as hazardous in
spontaneous outbursts of coal and gas or even placed beyond classification.
Due to the heavy conditions of coal extraction and the low quality of mine
works the annual output that is manifestation of mining potential does not
exceed 600 thousand t in 105 mines or 64 per cent, of which 47 mines have
their annual output of 300 thousand t. It is only 26 mines that provide 1,000 or
more thousand t of output. Thus the average productivity of a mine comprises
600 thousand t that is much lower than the similar index of adjacent and distant
lands.
Deterioration of Ukrainian mine facilities is accompanied by the dramatic
reduction in the number of mining enterprises. In the Register of coal mining
enterprises the number of enterprises by the beginning of 2005 was 285 mines
and 9 open-cuts while only 164 and 3 of them correspondingly are practically
involved in coal production. In 1991 their number was 275 mines and 8 open-
cuts, that is the quantity of operating enterprises has reduced by 1.7 times.
On the ground of lack of new construction as well as reconstruction and
modernization of existing mines there has been a decrease in coal industry
output from 135.6 Mt in 1991 to 78.0 Mt in 2005.
Low technical and economic data of coal industry of Ukraine has
predetermined the necessity of its restructuring which most intensive period
started in 1995.
The world experience shows that coal industry restructuring is usually
conducted in two directions. The first direction is to close and liquidate those
unprofitable coal mining enterprises which life in the modern economic
conditions is either problematic or impossible. The second direction is to
improve the effectiveness of prospective coal mining enterprises using their
own finances, state budget assistance and other financing sources.
In Ukraine the main and single recently used restructuring direction was that of
mining enterprise closing.
Due to mines closing the production facilities got reduced by 22.4 Mt, the
output by 5 Mt correspondingly. One should mention that these data relate to
dramatic reduction that had taken place in the year on mines closing while even
in the previous year the output by that category of mines had been 2-3 times
higher.
At closed mines there remain more than 900 Mt of industrial coal reserves. The
negative aspect of mines closing is the appearance of depressive coal regions
like cities of Stakhanov, Shakhtyorks, Snezhnoye, etc where diversification of
production is problematic and new vacancies through new mine construction
are impossible due to its absence. Thus the social tension appears that cannot
be fully neutralized. Serious economic difficulties arise too.
Stabilization of 1999-2004 when the average coal output got fixed on the level
of 80 Mt demonstrate that the branch with its inner reserve exhausted is unable
to exceed this level without assistance by the state. Of course, it is unable to
satisfy maximal possible national demand in fuel and power resources that is
estimated to reach 90-95 MT of coal in 2006-2010.
The analysis of Ukrainian mining facilities and production potential of mines
and open-cuts shows that cardinal measures are required to improve the branch
effectiveness up to the target data.
Specialists of DONUGI quickly and operatively executed the task by Ministry
of Coal Industry of Ukraine and namely corrected the Programme of the branch
development for the period up to 2010.
Now we believe that the further development of coal industry of Ukraine shall
have at least two directions.
On the ground of evaluation of production potential that cannot be improved in
the coming decade either by new mines facilities or by those of reconstructed
mines the only way to increase output is to improve the existing facilities’
status and to maximize the degree of production capacity utilization.
To find reserves for coal output increase with minimal cost we propose to make
audit of mine facilities for which purpose all mines and open-cuts should be
divided into the following groups:
* I group – prospective (basic) mines where through new heavy-duty
equipment introduction the output growth is possible together with
technologic, economic and financial data improvement;
* II group – mines that require scientific approach in weak points elimination
for further introduction of new technology;
* III group – mines working on below 1.0 m coal-seams that require new
technology or modernization of existing methods and machines for effective
mining;
* IV group – mines combining geological, mining and production conditions
typical for II and III group.
Research shows that in the recent decade the leading group of prospective or
basic mines including 53 enterprises or 32.1 per cent of the total group of mines
having production capacity. Their summarized industrial reserves by 1 January,
2005 are in excess of 4.54 billion t or 70 per cent of all reserves by operating
mines. These enterprises use prospective mine layout schemes and advanced
mining methods with the equipment of new technologic level. Their
summarized production capacity is as high as 52.3 Mt corresponding to 57 per
cent of the total production potential of coal industry.
The II group includes 30 enterprises of relatively good state of mine works and
considerable coal reserves exceeding 1 billion t. These potentially prospective
mines could transfer to the I group supported by the state assistance.
The above two groups make the backbone of coal industry of Ukraine their
output in 2005 having been 66.7 Mt or 83.3 per cent of the annual branch
result.
Concentration of state assistance and private capital investments in these
groups of mines together with other sources of financing could provide the total
national coal output of 88-90 Mt in 2010. The sums would be directed to
capital construction and technologic re-equipment according to the Programme,
and first of all for mining and road-heading machines purchase of new
technologic level.
The III group including 40 mines that are able to follow the data of 2005 and to
produce about 9 Mt per annum up to 2010-2012 supported with the state for the
production cost of 1 t of mined coal.
That is why for the IV group such measures are required as their operation life prolongation through reconstruction, modernization and local procedures for mining system improvement.
Closing and liquidation of mines is only possible when their balance coal reserves are exhausted and mining operations are executed on beyond-the-balance reserves with exclusively low labour productivity and technologic and economic results.
The coal output increase due to reconstruction, modernization and technologic re-equipment of operating mines accompanied by their closing and liquidation reduction could become incompatible with the needs of Ukrainian economy in future.
Consequently one should state that the basic direction of coal industry development now and in medium future is the increase of work effectiveness and profitability of operating coal-mining enterprises with the limited range of closing and liquidation among unprofitable mines.
In the distant future development of the mine facilities of Ukraine is due to new mines construction on prospected areas in accordance with the Ukrainian Coal Programme which production and economic parts are developed by experts of DONUGI.