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Coal Sea Port of Shakhtersk opens up new horizons

In fact Uglegorsk district was created due to its coal deposits and every Uglegorsk family is in this or that way engaged in coal industry.

East Mining Company in Uglegorsk district is the major coal mining and shipment company in Sakhalin, comprising Solntsevsky Coal Mine and Coal sea port of Shakhtersk. We reported on Solntsevskiy’s annual performance and today we will dwell on the issue of major sea coal terminal of Sakhalin. It's one thing to mine the coal, but quite another to sell it, therefore coal shipment is the sole but very important function of Shakhtersk port. Yuri Gvozdikov, the Executive Director of Coal Sea Port of Shakhtersk LLC, shared information on company performance in the preceding year and its future plans.

Yuri Fedorovich, which 2016 objectives have you met? What rates have you achieved?

— The plan was to ship 4 mln.tons, but we managed to make 3 mln. 100 th. tons. Due to bad weather conditions we had only 105 days instead of the rated 135 for shipment operations. However the port managed to set up a new record with the preceding rate making 2.85 mln.tons (2015). In 2016 this figure increased by 250 th.t. Daily shipment rates are also quite impressive — 32 th.t. per shift. Together with Rosmorport we arranged bottom dredging and pulled up 47 th.t. of soil. This work can be classified as scheduled, so the dredging was arranged by the designed values.

— Did you buy any machines or equipment in 2016?

— We’ve bought a lot of new machines: two Liebherr-544 and Liebherr-554 reloaders with bucket capacity of 6 and 6.5 m3, two huge bulldozers with 22 m2 blades and two new front-end loaders Liebherr-580.

— What do you do with old machines? Do you still operate them?

— We rent a lot of machines, so we give them back to operate new ones. This year we install a stacker (telescopic belt conveyor) with 1.5 th.t./h capacity at the eastern wharf, therefore our annual loading plan for this area makes 1.5 mln.tons.

— Do you upgrade your own fleet?

— Yes we plan to acquire 6 vessels with 650 t deadweight each in 2017 for the eastern wharf. We expect the first vessel to be delivered at the beginning of May, so by this time we should hire the crew. By the end of April the first crew will take over the first vessel at the dockyard. The deadweight of 650 tons is optimal based on the sink capacity, its depth and area.

— Let’s talk about your staff… Does the staff attitude to work change with the company development? How did the dockers’ labour capacity change? It’s actually the main profession in the port…

— Their attitude changed indeed. They are all enthusiastic about their job and we almost have no down time, since in 2016 we resolved to pay for the actual performance of each employee. We have a rates system: the more freight is loaded the more salary is paid. At first our staff was suspicious of this novelty, but soon after the salaries of several brigades were raised by twofold (90 th.rubles vs. 50 th.). Currently all brigades try to keep up with the rates and are almost on the same (high) level. Once the brigade’s performance made 200 th.t., which is 5 th.t. per docker.

— What is the average port salary?

— Dockers earn around 70–80 th.rubles per month. But if they had more shipment days this year, their salary would have been higher.

— What about other employees?

— This year the salary of supervisors, economists and accountants was raised.

— Are there any career enhancement or teaching opportunities for the staff to earn more money?

— Yes, we have a distance-learning course for dockers and courses for bulldozer operators. The company covers all the expenses.

— Does the port working environment change?

— Our dining facilities work 24/7 during navigation season. We’ve renovated it (for the first time since 1950), bought new ovens and equipment. Then we’ve renovated the dormitory accommodations, repaired the building face, port structures and mooring berths. This year we’ve spent 60 tons of cement for maintenance and repair works. Apart from that we’ve opened a medical room and arranged new water supply system in the port. Before we used to bring water in cisterns, and now it is supplied from central water pipe.

— As far as we know Vladivostok free port regime will cover Uglegorsk district. What benefits will that bring?

— First and foremost it’s tax relief, which is of paramount importance for start-ups and developing companies like ours. East Mining Company development project, comprising Coal Sea port of Shakhtersk modernization, is just the first stage. At this initial stage dynamic development is crucial and free port territory status will certainly help us.

We are also planning to open a checkpoint at Shakhtersk port, which means that all the foreign vessels loaded will execute all the required documents directly at our port. We will arrange all the formalities for checkpoint opening.

— Where and how are the documents currently executed?

— Currently a vessel should first enter Kholmsk port, wait in line, make the documents for RF border opening and then follow to us for loading. Having received all the coal documents the vessel goes back to Kholmsk and has to wait in line again. All these expenses are covered by us.

— What is the price for the vessel to go a long way round?

— Time is the main point, since a vessel wastes it’s time for Kholmsk formalities, then goes to us and then back to Kholmsk.

— Are you planning to engage new employees this year?

— We increase the number of employees every year. As we buy new vessels, we need to hire a crew of 36 people. Plus we are planning to launch oil-loading terminal this year. New machines — new employees. The project is approved by all the corresponding state structures: Rosmorport, sea ports administration of Sakhalin and Kurils. This year we are also planning to open our own ARU (accident rescue unit) and will install state-of-the-art equipment on one of the tow boats to use it for tackling oil spill problems.

— Why do you need the oil-loading terminal?

— First to collect waste oil-contaminated water and supply it to our vessels, second, to arrange their bunkerage. Then we plan to construct a 3000 t. petroleum storage depot, which will provide fuel both to us and to Solntsevsky coal mine. In perspective we are planning to supply fuel to the whole region.

— What are your plans for 2017?

— We are planning to ship 4.5 mln.tons of coal.

— What if the weather won’t let you work at full capacity?

— We will minimize this risk by buying new vessels, which will be loaded in the eastern wharf. It will help us to raise the daily output rates. We plan to load 3 mln.tons of coal from the coal wharfing and 1.5 mln.tons from the eastern wharf.

— Thank you for the interview. We wish you and your team to reach all the objectives and set new records.

12 January 2017

Solntsevsky Coal Mine set up an annual record.

Sakhalin’s major coal mine beats the annual targets. Solntsevskiy coal mine miners mined 4 mln.tons of coal. The coal mine reached its annual rated figures of 3.5 mln.tons on 1 December and set a new record on 30 December.

Solntsevsky Coal Mine set up an annual record.

12 January 2017

According to Igor Kovach, the mine director, the company has reached high production rates due to well coordinated teamwork and production modernization.

- As we have said before well coordinated teamwork and acquisition of new machines contributed to our overall success. The coal mine is controlled by East Mining Company, engaged in coal-mining development project in Uglegorsk district. The modernization facilities comprise Solntsevsky Coal Mine, Coal Sea Port of Shakhtersk and a new conveyor between the mine and coal delivery port to the region’s sea gates (the longest in Russia). Following our development project we have acquired 20 BelAZ with 220 tons capacity, three Komatsu and Hitachi dredgers with 23 m3 bucket capacity each. New machines opened up new perspectives for us. We’ve invested in training of our operators and drivers and the results are breath-taking. Each single employee contributed to our success. Today coal mine system is running like clockwork with each employee fully capable to do his job and trying to do it good. We not only discharge our current tasks – we break the records.

- Igor Aleksandrovich, the growth of production volumes presupposes staff increase. How do you engage new coal mine staff?

- Staff shortage is Sakhalin’s challenge in general. The number of employees grows day by day and currently the locals cannot satisfy our workforce demand, that’s why we hire new staff from other Russian regions. It’s easier for the company to hire a local, who will have no problems with accommodation, whose family is living nearby and who is motivated to stay employed as compared to non-residents. Put it differently a non-resident specialist would rather stay here if he is well-paid. Unfortunately not all locals are qualified enough: Shakhtersk technical school, where the mining specialists were trained, was closed; then after a while Shakhtersk lyceum was turned into technical school with the branches of study corresponding to our demands, but that’s not enough. The right moment was missed and the teaching staff is no longer available. East Mining Company management understands it and plans to buy modern simulators for Shakhtersk mining technical school to train large dump trucks drivers. Although these simulators are very expensive the company understands that it’s a crucial investment in the future. Anyone can get a driving license at school, but it’s not that easy with a 100 t. BelAZ.

- Why would the locals work for your company?

- Uglegorsk district with its self-explanatory name is the major coal mining area in Sakhalin. Almost each family is in this or that way engaged in coal mining. Coal industry is the region’s future and East Mining Company is not a temporary investor, trying to get easy money at the peoples’ expense – EMCO’s investments in Uglegorsk district exceed billions of rubles and it has long-term plans. What does it mean for the locals? Stable development and future perspectives for decades.

- What about the salaries at the mine?

- The average salary exceeds the average regional rates and currently makes around 65 th.rubles. Of course not all the salaries are the same: for instance a dredger operator can earn max. 220 th.rubles; a dredger operator would never find such a well-paid job anywhere else in Sakhalin. Tip-truck drivers get around 45 - 120 th.rubles, depending on their proficiency and machine itself. A newcomer would never operate a 220 t. BelAZ, first he needs to gain experience at a smaller machine - 55 tons, 90, 130 and then 220 tons. I'll put it this way – the one who wants to earn will earn, nobody would ever pay to someone who is doing nothing.

- I hear it told that non-residents have more preferences, new machines and huge bonuses… Is that correct?

- There will always be someone who will be dissatisfied. As I noted before the company would rather hire locals. But it must be borne in mind that save for Solntsevskiy mine nobody is able to operate 90, 130 and 220 t. tip trucks in Sakhalin, and 12 - 23 m3 bucket capacity dump trucks, which means that Sakhalin specialists are not qualified enough to operate such huge machines, therefore we had to hire non-residents. But with the time the locals have mastered these machines and operate them successfully, setting new records. We also have mixed teams (locals and non-residents).

Talking about rewards and bonuses, I would stress that they are available for those who really deserve it. There is no sense to praise lazy bones. We don’t need to go far - in 2016 90% of all the staff awarded in celebration of Miner's Day were locals.

- Igor Aleksandrovich, the company is progressing steadily, you’ve told us about setting up new records and raising mining capacities. Don’t you think that such a huge company should be more socially responsible?

- You are right, the company is progressing, which means that it should contribute to regional development. East Mining Company is planning to raise its coal mining capacity to 10-12 mln.tons of coal, which will create new jobs, tax yields on all budget levels, including local level. To make all this come true EMCO should invest billions of rubles in its production with such expenses presupposing due calculations and planning. Three years ago nobody knew anything about Solntsevsky coal mine and now we are visited by the heads of major equipment producers, like Komatsu or BelAZ. EMCO made it possible for mine employees to participate in specialized exhibitions in other regions, visit other major coal enterprises, put it differently, to adopt new experience (last time it was Las Vegas).

Social responsibility of a business entity primarily covers the population life quality. If business success is attributed to the territory itself, the company should invest in it, raising the population living standards. Now the company is on the edge of leap forward in its development, which for EMCO means 45 bln. investments and 10 mln. tons of coal capacity. That done the company could implement large-scale social projects and that’s when one could make social claims. Sure enough the company is currently deeply engaged in social projects and initiatives. In order to substantiate my statement in the past two years EMCO was announced the winner of regional competitions “Philanthropist of the Year” with its major projects including church construction in Uglegorsk and monument erection in Shakhtersk. EMCO brought Marine fleet day celebration in the region back to life. Do you remember how the Miner's Day was celebrated before and now? The company’s charity activity covers sports and culture, it helps the veterans and orphan asylum. Any social responsibility should be ratable – it will extend with the company’s growth rates.

- Mining operations are directly related to ecology. With enterprise development the environmental stress accelerates. 2017 was announced the year of ecology. What is your contribution to this area?

- Environment is a crucial issue, important for any and all employees and residents. We realize that we are responsible for environmental issues. People used to complain about open tip-trucks transporting coal on public-access roads, when the coal was dropping off the trucks thus causing discomfort to all traffic participants. We’ve introduced a new rule that each coal transporting truck should be covered with a tent. Of course not all the drivers follow this rule due to lack of time or laziness, so we will appreciate any information on such violations to take the corresponding measures.

Apart from that this spring we are planning to install and launch a water purification plant at Solntsevsky coal mine, with the company’s investments exceeding 42 mln.rubles for acquisition and installation. Solntsevsky Coal Mine has already made a contract and executed all design works. The plant can clean industrial water from the mine in the required quantity.

- What are your plans for 2017?

- This year we are planning to mine 4 mln.tons of coal. Judging from our experience in 2016 we know we can make it. This year the overburden coal ratio will raise, so to mine 1 ton of coal we will have to remove more rock. But we are ready to do it. Apart from that we are planning to buy a few new auxiliary machines (bulldozers, loaders), but not the primary machines like tip-trucks or diggers. We are ready to set up new records this year.