Monday, December 15, 2014

Ukraine As Seen Through The Eyes Of A Geologist

by Vadim Zolotaryev,
translated by Eugenia (thanks so much!!)

A matter-of-fact view backed by numbers
07-12-2014: By profession, I am a geologist, not a fortune teller or a psychic. I have no way of knowing what Putin is currently thinking of or what Poroshenko and Obama talked about yesterday. I am not on intimate terms with oligarchs of different countries involved in the events in Ukraine and have only a vague idea about their financial machinations. But I know the mineral resources that are the foundation of the Ukraine economy and, based mostly on that knowledge, I am offering my understanding of the current situation.

In the Soviet Union, Ukraine was above all the premier metallurgical region.

The Krivorozshskiy ore field is the second largest in the world (the first is the Kursk Magnetic Anomaly). The Donetsk coalfield is located close to the Krivorozshskiy ore field. The distance between them is only 300-400 km. There is no other place in the world where ore and coking coal are found in such quantities so close together. The Nikopol deposit of manganese ore needed for Siemens-Martin process of steel production is also nearby. In addition, the Kremenchug, Belozersk, and Kerchensky ore deposits were also exploited.

On this base, Ukraine developed metal-intensive manufacturing: equipment for factories and mining industry, rail transport, sea ships, agricultural equipment, etc.

The byproducts of the iron and coke making were used in the chemical industries (acids, plastics, mineral fertilizers).

All these industries developed in the proximity to the sources of raw materials, and that process created the industrial South-East of Ukraine.

The project Novorossiya includes precisely these territories (Dnepropetrovsk, Zaporozye, Donetsk, Lugansk, Kharkov, Odessa, Nikolaev, Kherson regions).

I want to emphasize: Novorossiya is a unified industrial complex and not at all the place of concentration of the Russian-speaking population.

Nevertheless, it is directly connected with Russia. Since the Ukrainian industry was created in the USSR, the products of that industry were manufactured according to the standards suitable specifically for the former Soviet countries, i.e. Russia, Kazakhstan, Belarus.

In contrast, the Ukrainian industry is unsuitable for Europe or America. Everyone knows about the differences in the width of rail tracks, different European electrical outlets, but there are thousands of such incompatibilities. Therefore, the West can only make use of the Ukrainian raw materials.

But this makes all Ukrainian factories redundant, and, consequently, workers in these factories become redundant as well, followed by people that feed, cloth, and provide medical services to the workers. There is a reason why the West speaks about the need to reduce the population of Ukraine to 15 million people. And it does not matter which language these people speak.

The whole mess started not because of the language problem but because of the dispute where should Ukraine go: to the EU or ECU.

The authors of the project Novorossiya reasonably supposed that the South-East of Ukraine could be equally successful as an independent republic maintaining close ties with Russia or as a federal subject within the Russian Federation. However, as a part of Ukraine the South-East could be successful only if Ukraine keeps as close a relationship with Russia as existed in the Soviet times.

As a separate entity, Novorossiya could exist without Odessa or Nikolaev, thereby losing the shipbuilding industry, or without Kharkov, with its Kharkov Tractor Plant, but it cannot survive without its raw material base: Dnepropetrovsk and Zaporozye regions with their iron and manganese ore and Donetsk and Lugansk with their coalfields.

On the other hand, Donetsk People’s Republic and Lugansk People’s Republic by themselves have no means of existence.

Soviet geologists and economists had recognized the problems of the Donetsk coalfield. In order to understand these problems, let us discuss what is Donbass – the most renowned coalfield of the Soviet Union.

Firsts, this is a relatively small coalfield. Below, I list the resources of the main coalfields of the USSR for comparison:

Lensk – 2647 billion ton;
Tunguska – 1745 billion ton;
Kansk-Achinsk – 1220 billion ton;
Kuznetsk – 805 billion ton;
Taimyr – 583 billion ton;
Pechersk – 344 billion ton;
Donetsk – 240 billion ton.

By its structure, the Donetsk coal basin is, simply speaking, a large basket of ancient igneous rock approximately 70 thousand square km in size and 8 km deep. That basket is filled with sedimentary rock intermixed with layers of coal. But these layers are not horizontal but folded, disrupted, distorted, and displaced.

Total of 300 coal seams have been found. About 50 seams have the thickness from 50 cm to 2 m and are good for mining. Although now in Donbass ever the seams as narrow as 20 cm are being exploited.

For comparison: in Kuznetsk coalfield the thickness of mines coal beds reaches 20 m, and the seams are horizontal and located very close to the surface.

In Donbass, however, all productive coal beds lying close to the surface have already been exhausted. Now it is necessary to reach deep (1000-1200 m) to extract coal, and this is considering that sudden explosive ejections of coal, gas, and rock are possible starting from the depth of 500-700 m.

In order to ensure normal conditions for people working at great depths under high pressure and temperature, new technologies are constantly needed to remove gases from seams, provide ventilation and air conditioning in the mines, to develop and use special equipment allowing for the coal extraction without people, etc. All this requires enormous capital investments.

In the USSR, the same investment yielded 3 times more coal in Kuzbass than in Donbass.

Significantly, the rate of adoption of new technologies in Donbass started to decline back in the 1980s when the marked forces made inroads into our economy. This had an immediate impact on the annual coal production:

1940 - 94 million tons;
1970 - 218 million tons;
1980 - 223 million tons;
1985 - 200 million tons;
1991 - 165 million tons;
2000 - 75 million tons.

As can be seen, with the beginning of perestroika, the annual coal production in Donbass declines rapidly, because the exploitation of the Donbass coalfields was no longer possible without constant technological innovations. However, capitalists would not invest more capital into unprofitable enterprises. That is why Donbass mines are closing one by one, and mining accident after accident claim human lives.

At the same time, the quality of the Donbass coal is very high. Anthracite of such quality is ideal for metallurgy. Because of that, Soviet economists insisted that this high quality expensive coal should be used in a most effective manner, i.e. exclusively in Ukrainian metallurgy. Lower quality coal produced without additional expense alongside high grade anthracite could be used for burning.

The energy sector of Ukraine, as a part of the energy complex of the USSR, was meant to use Russian oil and gas as well as transfer of electricity from the power stations working on the low grade Ekibastuz and Kansk-Achinsk coal (these are the open-cast coal regions, with the production cost 10 times lower than in Donbass) and development of the atomic energy.

However, just a few mines in Donbass could supply the amount of coal required by the Ukrainian metallurgy sector, with just 1/100 of all Donbass miners needed to operate them.

Precisely the problem of Donbass miners was what kept the Donbass mines in the Soviet Union fully operational and the entire region subsidized by the state. Clearly, the elimination of townships, relocation and retraining of such an enormous number of people would raise an avalanche of protests. Since the people’s interests still dominated over the interest of the economy, a gradual re-specialization of the Donbass mining region was planned, with building of new, mostly equipment manufacturing, plants.

Naturally, after Ukraine’s independence, there could be no building of new plants; all over Ukraine, existing enterprises were going bankrupt and disappearing. The Donetsk coal was considered only as burning coal for energy production. However, producing burning coal at such cost is not just unprofitable, it is criminal, given that in the capitalist conditions the production expenses are often covered by human lives.

Yet capitalism went even further in its criminality. Instead of unprofitable coalfield, Donbass is now considered as a promising region for shale gas production.

Unfortunately, I do not know for sure what amount of shale gas is predicted to be in Donbass. Theoretically, in such a coalfield all rock should contain gas to a certain extent. Drilling for gas is much cheaper that mining for coal (both in the cost of the equipment and of the work force). Besides, drilling could be done at considerably greater depths. Thus, for investors there are all the reasons to expect the conversion of the unprofitable region into a more or less profitable one.

But that is for the investors. For the citizens of Ukraine, and particularly those of Donbass, such re-purposing of the region is turning into a tragedy. The main trouble is not ecological. The tragedy is that, with the shale gas production conducted on a large scale in the former coal-producing region, most of the Donbass population will become redundant, lose their jobs and means of existence. (Donbass is the most densely populated region of Ukraine, where most of the residents are connected to the coal mining industry). Moreover, a larger part of the South-East of Ukraine will become redundant as well, since only ore mining companies will survive, whereas all metallurgy plants will close followed by machinery and equipment plants, pipe rolling plants, shipyards – all this industry will cease to exist.

I cannot say that I admire Putin or that Russian oligarchs are dearer to me in any way than oligarchs of other countries. But the fact that Russia has the intention of preserving the Ukraine’s metallurgic complex makes me an unwavering supporter of Putin’s policy. This policy is, of course, completely devoid of altruism or disinterested love to the Russian-speaking population of the South-East. Equally, the Poroshenko government could not care less about the Ukrainian people.

The pro-American government of the today’s Ukraine is deliberately doing everything to destroy the Ukrainian metallurgic complex, to isolate the Ukrainian ore deposits from the coalfields, to destroy Donbass.

The military actions destroy first the infrastructure of the Donbass towns. Schools, hospitals, communications are being targeted; mines are being destroyed. Indiscriminate artillery fire terrorizes the population causing mass departure; the residents feel increasing hatred toward the Ukrainian army and Ukraine as a whole. Throughout Ukraine, antipathy is being inflamed towards “colorads” that want to present a piece of Ukraine to Putin.

However, Russia is not interested in Novorossiya, as represented by Donetsk and Lugansk People’s Republics. Russia has plenty of its own coalfields and gas deposits that, in contrast to Donbass, are profitable. The cost of coal production in Donbass is considerably higher than in any Russian coalfield. Furthermore, Russia would like to preserve the metallurgic complex of Ukraine, i.e. to keep the link between Donbass and the Ukrainian iron ore deposits.

That is why Russia is in no hurry to recognize the independence of Novorossiya. The separation of Donbass from Ukraine is an American project. The project that will bring suffering first of all to the people of Donetsk and Lugansk regions as well as to all the people of Ukraine.

Currently, self-proclaimed republics are running election campaigns, and there is a real danger that the power will be assumed by people who, while fighting for the independence of the republics, are trying to attain the independence precisely to achieve the objectives of the American project.

Donbass does not need independence. Donbass needs to unite with other industrial regions of Ukraine, primarily Dnepropetrovsk and Zaporozye. Donbass needs the entire Ukrainian industry to be preserved.

The survival of the Ukrainian industry is a necessity for the Ukrainian nation as a whole. But the majority of Ukrainian people do not understand their true interests, do not understand that Ukraine, with its resources and population, cannon be an independent state, that to ensure employment for the people Ukraine requires labor-intensive industries. The products of that industry should be exported, and it can only be exported to the former Soviet countries, and the separation from these countries, first of all from Russia, would mean ruination for the Ukrainian nation.

However, nobody explains any of this to the Ukrainian people. The pro-American mass media are filled with russophobic propaganda, while Russian mass media focus on the defense of the Russian-speaking population saying that Ukraine is no more, that it has never really existed and should not exist, thereby, from its own side, inciting hatred between Russian and Ukrainian people and promoting the separation of Donbass.