Black Gold of Bogatyr
The Ekibastuz coalfield is a unique one. It has over 13 billion tonnes of coal and it has been operating since 1954. During this period 2.2 billion tonnes of coal were mined. In 2003 the coal production in the Ekibastuz basin amounted to 50.2 million tonnes, including 33 million tonnes mined at Bogatyr Access Komir (BAK) LLP, which became the owner of the Bogatyr mine, the world’s largest coal mine, on November 6, 1996. This conversation with BAK Director General Dennis Price began with a question regarding primary goals of this coal mining company.
Such powerful power plants in the Urals and Western Siberia as the Reftinskaya and Troitskaya power plants and all five heat power plants in Omsk are built to burn Ekibastuz coal. Ekibastuz coal still has a stable position both on the Russian and Kazakh markets due to such advantages. At the same time during all these years, the power companies expressed their wishes to improve the quality of coal shipped to them and to stabilize the fluctuations of ash content in cars in particular.
The work on solving this problem began with the international meeting on Development of the Strategy for the Further Development of Mining Operations at the Bogatyr Mine held in 1998, with the participation of representatives of such companies as Morrison Knudsen, MAN TAKRAF, ?&?, the Skochinsky Institute of Mining, and Karagandagyproshakht. They determined the major goals for the long-term development of the Company at that meeting. The central idea was the implementation of state-of-the-art technologies for mining and overburden operations.
At the same time you tried to solve the problem connected with the reconstruction of the transport scheme of the former Severny mine…
Absolutely right. The aim of the reconstruction that we began in 2000, is reducing the mining operations front, which is currently a few kilometers long. We will fix this in that part of the mine where coal has its best quality parameters. Also, there is a low overburden ratio; and therefore, coal mining would be more efficient. As for the unperspective coalfields, they will be conserved and isolated by inert clay rocks. Starting in 2005, we will apply a new technology in the mining operations at that complex by changing the bucket wheel excavators to hydraulic ones, the railroad transport to both Motor-and-Railroad, and blending coal in piles made by trucks. We have concluded contracts with Libcherr and Caterpillar for purchasing two hydraulic excavators and five big trucks. This equipment should be delivered to the Severny mine in the first quarter of next year.
Is it true that the conveyor-and-railroad complex, which was built at Bogatyr by BAK, will continue to exist until the main stage of the enterprise’s technical rearmament is not realized?
Yes. We carry out hard work to be prepared for the realization of the main rearmament stage, which is the transfer of the mine to a new technology for coal mining, removal, transportation, and recovering overburden. The mining complex project involves completely changing the bucket wheel excavators to the single-bucket hydraulic ones, and railroad transport to trucks and conveyors. It is planned to blend coal by quality, layer by layer, with the stackers making piles at the blending yard. Coal will be weighed, dosed and loaded by special loading stations into trains, which will go on to loading without uncoupling the cars.
What does the project envisage for complete conversion to cycle flow technology for the full blending of mined coal?
During the upcoming years we need to build several trunk conveyors with the crushing-and-loading areas at the Bogatyr mine. Coal will be continuously shipped to those areas by trucks, and then it will go up to a 200 meter elevation by a big conveyor almost one kilometer long. The productivity of the hoisting conveyor is 40 million tonnes of coal per annum. We will assemble a blending-and-loading complex at an elevation of 170 meters. That complex will consist of high performance equipment: stackers, loaders, and catching and unloading conveyor systems. That great technical construction will end with areas for loading coal into rail cars. The circularly assembled loading tracks will have car scales, which will control the weight of each rail car and of the whole train.
The rope bucket wheel excavators used for overburden operations will be changed to hydraulic ones. The rocks will be moved by trucks and rail transport. The mining mass will be removed out of the mine and stored at the internal dump.
What does the company get upon achieving that goal?
We are going to implement the project in the next four years. The total amount of investments is expected to make up over $200 million. Beginning in 2009, we will considerably shorten the distance of coal and overburden shipment. It will considerably increase our employee’s labor productivity and improve the quality of coal shipped to our consumers. Finally, our company will be able to increase our coal mining volumes up to 48 million tonnes per annum and keep the net cost of power raw materials at today’s level for a long period, independent of the mining depth.
Comprehensive environmental protection is an important factor indicating the stability in the work of any company. What about Bogatyr Access Komir?
We are determined to improve the environmental situation in Ekibastuz. We spend more than 120-150 million tenge on environmental protection annually. Currently, we carry out a number of programs in this sphere, including maintenance, overhaul and repair of equipment for environmental protection, and rehabilitation of waste water treatment facilities in the Bogatyr mine. Spray systems are used for dust control, which allows dust to be reduced by 70%. We also succeeded in reducing the dust and gas quantity by 30-40% during blasting operations. As a result air quality has improved. A lot of efforts are taken for soil reclamation and landscaping of dumps, as well as prevention and extinguishing of spontaneous fires on rock dumps. These measures, of course, positively influence the environment in the region. For about a year and a half we have been executing a project that is actually aimed at examining the environmental situation at the company and that helps to define ways for further environmental improvement.
What is the company’s role in the region? What community programs does Bogatyr Access Komir take part in?
Our company is a large urban enterprise and also a member of the Ekibastuz Association of Industrialists and Entrepreneurs. A lot of small and medium-sized businesses in the Pavlodar region provide goods and services for Bogatyr Access Komir. Contracts with the company have been and are the only incentive for further development for many of them.
In addition, Bogatyr Access Komir is actively executing charity and sponsor projects. The company has contributed greatly to the development of cultural and intellectual life in the region, providing financial assistance to the Pavlodar Foundation for Culture Support, the Irtysh sports club, the cathedral of the Annunciation, and Mosque in Pavlodar. We also provide assistance to the football team and a charity foundation in Ekibastuz. A unique medical diagnostic centre was built in Pavlodar with the direct involvement of our company.
On 22 September 2002, Bogatyr Access Komir and the Administration of the Pavlodar region signed an agreement on mutually beneficial co-operation in order to develop and maintain the region’s social sector and the sustainable development of the company. According to this agreement, the company will annually provide 1.5% of the cost of coal sold for these purposes. Over 530 million tenge was spent in 2003 alone, and it is planned to spend another 280 million tenge this year. As for the purposes of the payments, there are different targets. Generally, the money is used for community and social needs, money for Ekibastuz development, landscaping and street lighting, etc.
What are the prospects for the development of the mining sector and especially the coal industry?
The mining sector is seen as the 'locomotive' in the program for economic development in Kazakhstan, and there are serious grounds for this, because this sector is one of the most rapidly developing. It is obvious that huge investments are necessary, because production facilities are worn out, investment cycles are too great and capital intensity is very high. Our company is a perfect example of this, for it is one of the leading enterprises in the region, spending a lot of money for upgrading production facilities, introducing new technologies and purchasing modern equipment.
As for the coal industry, even though it has declined a bit on the global scale, most of Kazakhstani heat and electric energy is being generated from coal and the situation is hardly going to change. Today, Bogatyr Access Komir is continuously increasing its production rate, and I believe that it is not going to slow down but will increase even more, at least in the next 20 years.
Table of contents
PetroKazakhstan: Transforming Subsoil Energy Terrance J. Powell
Legal Environment for Service Companies Saule Akhmetova
DRESSTA in Kazakhstan: proved over time! Wieslaw Jakobik
Black Gold of Bogatyr Dennis Price
The Kazakh Upstream Tax Regime: Comparative Analysis Gerard Anderson
A Public Shell, or How to Enter the US Stock Market Oleg Batratchenko
