Translation of the original article “Dirty Fuel”, published in The Washington Post – most famous and influential newspaper in the United States of America.
Authors – Joby Warrick and Steven as mufson.
Translation – Yaroslav Vistalux (twitter.com/VJaroslaw), according to “Infocast”.
Every day, rusty cars plunge into coal mine in Eastern Ukraine, to take out a new batch of black fuel that helps to Fund the local “rebels” (illegal military formation – approx. ed.), Supported by the Kremlin for nearly six years.
This rare form of coal with a metallic luster, called anthracite, it burns almost without smoke and has a great price, even in difficult economic periods. And yet it is contraband that is illegal to sell to foreign buyers. Therefore, the loaded coal wagons head East to Russia, where they disappear without a trace.
Under the scheme, which played out hundreds of times, coal is a network of Russian companies, which, according to the documents of the Ministry of Finance of the Russian Federation, resell it to foreign buyers who have no idea what to buy the coal to be of criminal origin from the combat zone. Recently, however, due to the fall in fuel prices as a result of global pandemics even of this coal does not attract potential customers. And that is probably catastrophic news for the breakaway Eastern regions of Ukraine (de facto Russian-occupied regions – approx. Ed.) and Russian that support them.
If you believe the official reports and estimates by independent analysts, despite the continuing illegal trade, less coal in recent months crossing the Ukraine-Russian border, and the market price of anthracite coal continues to decline. For Eastern Ukraine this means a reduction of wages of miners, the loss of income of the separatist leaders and the increasing instability in the region, which has long turned into a continuous headache in US relations with Moscow.
“This way of exports, in principle, intended only for the export of stolen goods from one country to another,” says analyst Brian Milanowski, which in Ukraine is studying the economy of the Eastern regions. “Now the money needs to get into the wallets of people in the “Republic”, more do not fall, and this causes social tension. A pandemic Сovid-19 all only worsens”.
Under the threat of collapse is a source of income, which compensated for a huge amount – from $ 1 to $ 3 billion a year – which Moscow is spending to support the self-proclaimed “LDNR”, shares of the two regions, which are under the control of Pro-Russian separatists who are dishonest “civil” war against Ukraine.
These regions, collectively known as “Donbass”, is the location of the high-performance private coal mines and steel mills that were “nationalized” by the leaders of the “rebels” in 2017. Since then an endless stream of cars brought millions of tonnes of Ukrainian anthracite and steel in Russia in terms of what American and Ukrainian official representatives called a carefully planned scheme, which turns the illegal smuggling of hard currency.
As evidenced by the customs registers, more recently, the whole scheme was controlled by one businessman. Ukrainian billionaire Serhiy Kurchenko and his small network of companies controlled the flow of coal from Eastern Ukraine (ORDO – approx. Ed.) In Russia. According to the European and American investigators and independent analysts, the same network sold Russian coal buyers around the world, and with it the anthracite mined in the East of Ukraine.
Russian media reported that not so long ago Kurchenko has lost a monopoly on the export of Ukrainian coal, it was confirmed by official documents. However, companies related to Kurchenko, continued tons of export coal at least until the beginning of April this year – this is evidenced by customs of the Declaration obtained by C4ADS, a Washington nonprofit organization that specializiruetsya on analysis of data on illegal trade in war zones.
34-year-old Kurchenko, a longtime family friend of Viktor Yanukovych, the former President of Ukraine, which the people’s uprising in 2014 vinodela to resign and to emigrate to Russia. Kurchenko, who also now lives in Russia, the Ukrainian law enforcers accused of tax evasion and numerous other crimes related to its energy companies, he also listed the economic sanctions of the United States.
Attempts to get close to Kurchenko for his two Russian companies failed. In 2014 he issued a statement through one of his companies in which he denied all accusations, calling himself an honest businessman. After that, he refused any interviews and now only occasionally appears in public.
“He is hiding in Moscow all this time, because Ukraine declared him wanted, says a senior analyst at C4ADS Jack Margolin. But we see trading indicators, this does not prevent him to engage in the business”.
“This is money laundering”
By 2014, the Ukrainian region “Donbass” had up to 10% of GDP, mainly due to coal and steel. Anthracite is really very difficult to produce, because its reservoirs are at more than a kilometer depth. But its extremely high price provided tens of thousands of miners and served as a reliable base for the Ukrainian economy.
Almost all mines of this region belonged to two private companies, which continued its work even when the region erupted into war. After 2017, the Kiev government has imposed an economic blockade of the breakaway regions, separatist leaders have seized the mines and steel mills and announced his coal, but met with the refusal of the international buyers have to deal with the stolen goods.
Since then the region has become totally dependent on Russia, which has already spent billions of dollars to replenish its coffers “at least for basic costs,” says Anders Aslund, a Swedish economist and expert on the economies of Eastern Europe. “This economic hole, says Aslund. – It really looks terrible, all the major production cost “.
In the end, Moscow was forced to provide the separatists access to markets. European buyers can keep clear of stolen coal from the Donbass, but most of the other prepared to trade with Russia, which is the world leader in exports of fossil fuels of different types. Therefore, according to American officials and analysts, with the help of Russian coaches and corporate machinations of the Donbass coal now becomes “Russian”.
“They call it exports, says Milkowski. But really it’s just money “. Moscow trade with the Donbass being unnoticed, but impossible to hide. Import coal and steel from this region is fixed in the Russian customs declarations and judicial decisions. Ukrainian activists who oppose the Pro-Kremlin self-proclaimed “leaders”, using Twitter and other social networks to spread photos and videos of trains loaded with coal bound for the Russian border.
Most of the trains gets to Russia through a small border train station??”The assumption”. Google Earth satellite imagery to regularly reflect a long series of filled coal cars on railroad depot “assumption” that await pass through the station?? further South, in the port city of Rostov-on-don, one of the main transport hubs of southern Russia.
Analysis of Russian customs data bases held by the group C4ADS, showed that from 2016 to the end of last year at least 3.5 million tons of coal of Donbas crossed the Russian border. During the same period, trains were transported a minimum of 360,000 tons of steel and metal, the report indicates, the previous copy of which was provided??The Washington Post.
Ukrainian coal industry officials say that the illegal export of coal in Russia is actually much more, at least 6,000,000 tons of anthracite crossed the border until 2019.
The customs database is associated with Kurchenko companies at least one-third of the transported coal. At the end of 2018, the Russian media reported that one of the companies Kurchenko, “Gas Alliance”, have been granted monopoly control over exports of coal from Ukraine (outside of Kiev part of the Donbass – approx. Ed.).
Repeated attempts to reach Kurchenko for his company in Russia and South Ossetia was unsuccessful.
Free not very many records that would have shown what happened with the coal, which falls into Russia. Representatives of the Ukrainian energy company DTEK, a coal mine which was captured by the separatists, in their statements claim that about half of the coal is marked as Russian and transported by rail or by ships through the Black sea and the Mediterranean to Asia and Europe. Because of the chemical composition of coal in different regions of its origin are different, representatives of DTEK has been able to bring that part of the coal, according to the documents is of Russian origin, in fact, was produced at mines owned by DTEK.
Representatives of DTEK, in its statement listed the 20 countries that buy coal from the Donbass, the biggest buyers were Turkey, Romania, Belgium and Poland. Some customs Declaration directly indicate a European company as the ultimate buyers of Ukrainian coal, provedennogo transit through Russia.
Ukrainian company, which is due to the fall in the price of coal was forced to stop outside the mines of Donbass, which remained without work for nearly 30 000 miners, filed a formal complaint to the representatives of the governments of the European countries, demanding to stop the import of contraband fuel.
How much of the Donbass coal is outside Russia – today it is difficult to evaluate. As shown by the records of this coal Russia uses itself. But Moscow is not in need of foreign coal, because it is one of the world’s largest producers and exporters of the fuel. Analysts say that without the broad holding of special examinations will be very difficult to prove, there are a load of coal from Russia Russian, Ukrainian or a mixture of two types.
“But it is reasonable to assume that part of this [Russian] coal comes from Eastern Ukraine,” says Margolin.
Falling incomes and rising unrest
Ukrainian protesters and war veterans participate in the blockade of the station “Curve End” of the Donetsk region in February 2017, trying to stop the trade of coal and other goods with the Russian-backed rebels. (Aleksey Fillippov / AFP / Getty Images)
Recently, however, coal demand in the world declined sharply regardless of its origin. The price collapse began last year and accelerated with the spread of the coronavirus.
In November, the Russian news site RBC reported tense relations between the leaders of the “republics” and Kurchenko’s companies because of reduction of volumes of purchases of coal from mines under their control in the region. Instead of the promised 400,000 tons per month of Russian trains were taken barely a quarter of this amount, reported in the RBC. As a result, the company Kurchenko has lost the monopoly on coal from the Donbas, while accumulating in front of the “republics” incredible debts in the hundreds of millions of dollars – note on this website.
The decline in revenues from coal quickly turned into riots in a mining region, already brought to the edge of chronically low wages and the steady deterioration of working conditions due to lack of maintenance and upgrading the equipment of the mines from 2017.
The miners of Donbass (the Ukraine – approx. ed.) And members of their families via Facebook and other social networks complaining about the constant reduction of wages and long delays in payments, the report says Digital Forensic Research Lab, Washington analytical units of the Atlantic Council. The report cited photos of payroll, published anonymously by one of the miners, for which his monthly salary does not exceed $ 80 is a little more than half the minimum wage in Ukraine.
From the editorial, “Infobot”: the investigation of Digital Forensic Research Lab in the translation were published by us earlier.
Russian companies continue to illegally seize Ukrainian minerals – Atlantic Council”s Digital Forensic Research Lab
“Similar demands voiced in all the communities of miners of Donbass”, – noted in the report. In early may, striking miners blocked in the mine in Zorinsk, a coal town in the Luhansk region. In the message about the beginning of the strike, placed in the Telegram, the strikers said that the salaries were not paid for months. The strike was terminated on the sixth day after the promise to give them money, however, according to employees of the mine, at the end of may they still had not received a penny.
Last week from the reports in the Russian social network VK became known that the leaders of the
separatists began a blockade of a coal mine in Anthracite town 50 kilometres South-East of Zorinsk, named after the rich local deposits of coal – when more than 100 miners remained underground, refusing to get out of the mine in protest. In messages it was said that rescuers were forbidden even to bring the strikers food and water.
It is unclear how this unrest will affect the war in the region. Analysts say that the Kremlin is unlikely to do more for the economy of Donbass, while their own economy of Russia febrile pandemic and oil prices, which have fallen as a result of continuing price war with Saudi Arabia. Among Russian coal oligarchs, too, is growing resistance to the importation of cheap coal from abroad when the collapse of the energy markets.
“It was always clear that the Russians are not going to allow Donbass to compete
low price on the market of the Russian Federation, says Nikolaus von Twickel, a former representative of the OSCE. – However, if the workers of the region will not be able to find work in the mines and?? plants, some of them may decide that the best alternative to earnings will be joining the ranks of the separatist [military] groups, ” says Nikolaus. “People now say that the best business military,” adds von Twickel.
Law enforcement officers