We Look Forward with Optimism
The largest coal mining company in Kazakhstan, Bogatyr Access Komir, is not only well known in our country, but also abroad. An important event happened in the company’s life recently – the appointment of the new general director, Viktor Schukin, right after the coming of the new shareholder, United Company RUSAL. At the start of our interview we asked him about his career and the main stages in his life.
I come from Omsk Oblast. After graduating from a secondary school, I enrolled at Karaganda Polytechnic Institute. Having graduated from it in 1977 with a diploma in mining engineering economics, I joined the Irtysh Polymetallic Plant. That was the start of my career. I was put in charge of the Section for the Scientific Organisation of Labour and Regulatory and Research Work. Since 1981 I have worked in Karaganda as a mining engineer, task setter, and then as the head of the mining operations for the development and capital construction and as the Deputy Director for Economics of the Kuzembayev mine under the Karagandaugol production association.
I remember those days with a special feeling. Not only did the mine set records in coal extraction, its production levels were the best in the Soviet Union. From 1989 until 1993 I worked as Karagandaugol’s Deputy Director for Economics. That was a dynamic and interesting time. The association consisted of 89 plants, including 26 mines, 3 open-pit mines, 5 machine-building and repair workshops, and several construction organisations which employed over 104,000 people in total. I realised at the time that the knowledge I had was not sufficient, so I once again became a student of the Karaganda Polytechnic Institute but at a different faculty this time – the mining department. Later on I did a postgraduate course.
Things have started to change radically in my life and in 1994 I moved to Moscow. I worked as the Director for Economics and Finance, the General Director of Rosinvestugol, the first Deputy General Director of Rosuglesbyt and the first Deputy General Director of Transamurinvest. Last year I was invited to join Rossiysky Aluminy as the director in charge of the coal sector. I held this position up until my appointment as the General Director of Bogatyr Access Komir.
I have done some research work as well. I hold a PhD in economics. I published 17 scientific articles, manuals and treatises. I was also a member of the Educational Council for Dissertations, doubling up as a professor at the Faculty of Environment and Management of Natural Resources at the Moscow State Mining Institute.
I had also worked as a consultant and expert. I was a consultant in estimating the reserves and investment needed for the development of the Nikolsky coal mine in Buryatia. I issued recommendations with regard to the purchase of and investment in Krasnoyarskugol, and investment in the Elginskoye coal mine in Yakutia. I was one of the authors of the trust management project for the Severny mine in Ekibastuz.
Mr Schukin, what kind of issues are your staff dealing with now?
The most immediate challenge is to prepare Bogatyr Access Komir’s core operations for the autumn and winter period. We need to repair the mining-and-transport equipment and first of all rotary excavators and to start using additional large trucks. We will be focusing on carriage rolling stocks and also railway and other engineering communications, expansion of our coal storages which will be equipped with back-up rotary excavators. All this would allow for much safer loading of coal.
Of great importance is also the issue of providing the plant with railway hoppers. We persistently work to increase our own pool of rolling stock and the number of those we rent out from the Russian and Kazakh railway authorities. To show the scale of the problem, allow me to give the figures for January-February 2008: the volume of average loading per day came to 141,300 tonnes. We used 7,450 rolling stock per day for that.
Is Bogatyr Access Komir going to change its strategy?
No, it will stay the same. Under the programme for the development of the coal industry in Kazakhstan, there will be a need for 80.7 million tonnes of coal, including exports to Russia. That means that the company needs to increase its coal output to 17-20 million tonnes a year. In order to fulfil this within a short period of time, we will need to abandon the extensive strategy of development, which was prevalent historically, in favour of an intensive one. On top of that, both mines, Bogatyr and Severny, are being deepened by 6-7 metres annually and by 2020 they will be 350 metres deep. That will leave us no choice but to introduce new vehicle conveyor technology which will require the replacement of mining-and-transport equipment. To implement this strategy, we need considerable investment till 2017 which will be higher than the 2000-2007 level by a factor of 3-4 each year.
We have started replacing old technology. It will require large investment and will take a long time. This is because the radical reconstruction of mines is being done without stopping the production process. Our consumers have been receiving coal without any interruption and in the required quantity – a quantity that has increased significantly this year. In 2007, we sold slightly more than 38 million tonnes, and this year we will be distributing more than 45 million tonnes.
Over the past four years we have carried out a huge volume of construction and installation work aimed at changing the railway approaches to the mine. As a result we managed to raise the productivity of railroad engines by 18%. I would like to note that such results were achieved against the background of increased shipment of coal and deepening of the mine.
By introducing vehicle and railway technology Bogatyr was able to fully start mining for medium coal as early as this year. On top of that the productivity of rotary excavators at the run of mine stockpiles has increased by a factor of 1.5.
As regards the long-term programme, it envisages an increase in coal extracting capacity to 58 million tonnes, including 40 million tonnes at the Bogatyr mine and up to 18 million at the Severny mine.
On top of that the company has drafted an investment programme for 2008-2012 which is a mid-term strategic plan.
What can you say about the economic situation at the plant?
Let me stress what the last five years have shown that Bogatyr Access Komir is a very stable organisation. We are constantly working towards lowering production costs. We were able to invest the earnings we received into further production development.
At the same time we need to tackle issues that arise in relations with our customers. For example by 1 July 2008, Kazakh consumers have run into total debts of 1 billion tenge. We understand the problems that the power engineers were facing, therefore we expected a delayed payment but with the proviso that in the summer power stations would buy some of the coal envisaged for the winter.
What are the prospects for the development of the coal industry in Russia and Kazakhstan?
Both Russia and Kazakhstan are major coal extracting countries. For example Russia now ranks 5th after China, the USA, India and Australia in terms of the coal extraction and Kazakhstan is among the top ten countries. It must be noted that Kazakhstan leads among the CIS countries in terms of the per capita coal production.
Under the blueprint for the development of the Kazakh coal sector, there will be an increase in binding coal production (given Russian exports) from 82.1 million tonnes in 2007 to 121.3 million tonnes in 2020 or by 39.2 million tonnes. According to the blueprint, BAK will account for 46 million tonnes of coal in 2010 and in 2015-2020 55 million tonnes annually. So, coal production for the power engineering sector will be increasing.
Does you company suffer from a lack of qualified staff?
Yes, there is a shortage of qualified workers and engineering and technical staff. It is not easy to find electrical and gas welders or lathe operators today and even more difficult to find a geologist and surveyor. This is why we decided to find a solution to this problem ourselves. We have signed a resolution recently according to which seven graduates of vocational school No. 18 and of the Ekibastuz Polytechnic College were awarded scholarships. Those students have gone through a selection process. As of next year BAK will pay scholarships to the best students of vocational schools and colleges throughout the period of education.
We have been supporting six students of the Ekibastuz Engineering and Technical Institute since September 2007. These are young men and women who have not received educational grants from the government, but who we believe have a huge potential. The company will pay their grants until their graduation from the institute.
There is an issue that worries many miners: are you planning to change the system of motivation and pay for work?
We have always paid a lot of attention to this issue. Now, for example we are drafting a resolution to encourage the staff, who are involved in the loading of coal into rolling stock, and engineering and technical staff to perform better.
Is the company planning to change its approach towards investment in the social sphere?
The company’s social policy would remain the same. BAK’s contract for land use envisages the financing of the social sphere in the town of Ekibastuz and the region as a whole to a sum that is no less than 0.1% of the value of saleable coal a year. However the social assistance pattern might change.
Let me stress that the company creates the necessary conditions for our staff to increase their productivity. And today ahead of the Miners’ Day, I would like to congratulate all staff on the forthcoming professional holiday. For myself and for many of my colleagues, this is the most important holiday. On this day the miners hear words of gratitude for their hard work and the best of them get awards. I am always happy on this day and I would like to share that with you.
We Look Forward with Optimism Viktor Schukin
Kazakhstan’s Uranium Renaissance Sergey Smirnov
Oil Chronicles. Summer Was Hot Editorial
Internet in Kazakhstan.Despite a Wide Range of Choice Aleksandr Vasilyev
Kazakh Banks: Dire Outlook Editorial
How I built a multi-million dollar consulting business with 500 (borrowed) dollars in my pocket… Patrick Valtin
Public Speaking: the Key Component of Leadership Klaus P. Hilgers