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MeMyselfAndI
May 10th 2010, 06:40 PM
http://blogs.forbes.com/billions/2010/05/10/deadly-explosion-hits-billionaires-coal-mine/

<The death toll from explosions in a Russian mine partially owned by billionaire Roman Abramovich reached more than 30 early this morning. The search continues for trapped miners Sky News reported.

The first explosion occurred late Saturday and reportedly was caused by methane gas (See pictures of the damage). Among the victims are rescuers who were caught in a second blast, which occurred hours later. Reported estimates of those still trapped range from 58 to 83 miners.

Raspadskaya is Russia's largest underground coal mine. The explosion comes about a month after an explosion at a Massey Energy Company mine in West Virginia killed 29 miners and ignited a criminal investigation into the safety procedures. Methane gas is the apparent cause of both accidents. A 2008 CDC report explains that methane gas is a natural by-product of coal mining, but needs to be ventilated with fresh air. An unexpected build-up of the explosive gas can lead to these devastating accidents.

Abramovich's Millhouse bought a stake in Highland Gold, a UK mining company that operates the Russian Raspadskaya mine, in 2007 and later sold a portion to two billionaire business partners, Alexander Frolov and Alexander Abramov.

At the time we published our list of the world's billionaires in March, Abramovich ranked no. 50 with a net worth of $11.2 billion. Only a tiny amount, less than $100 million, came from Highland despite the fact that he and his firm had been the largest shareholders.

These days he is well-known for his opulent lifestyle; he owns U.K. soccer team Chelsea, the world's biggest private yacht, a personal jet and several homes. But the mogul actually comes from quite humble origins, as noted in our recent piece on some of the most notable self-made billionaires, Rags to World's Richest.>

The current death toll is at 32, with many more still trapped underground, their condition unknown. Now, this is the biggest mine-related emergency in Russia yet, but God knows not the only one. Overall, at least 500 Russian miners have been killed on the job in the past two years before this.

Here is why this happens. Back in 2008, the federal government has, finally, pressured the mining bosses to install methane build-up sensors in their mines. Before, the deadly gas would pour in, and the workers would have no idea, before it's too late. Deaths were even more frequent back then. Now, after the sensors were put in, the bosses saw that having to stop all work, evacuate the miners, and, basically, shut down the whole operation for hours, after an alarm, was hurting their profits. They were losing money every time this happened. So, they started covering the gas sensors with jackets, or pieces of material, so they wouldn't go off so often. As a result their profits went up again. So did the number of lives lost in the mines. Miners in Russia are paid about $200 a month. Most have families to feed. They don't have unions (last man, who organized mine workers in the Urals back in the 90s, was murdered back in 2003, beaten to death and his body thrown into a deserted mine). Is the situation in mining in the US similar? Tell me it's better...

Michael
May 10th 2010, 07:01 PM
Is the situation in mining in the US similar? Tell me it's better...
Sorry, no can do. :shrug:

That particular news story from Russia looks depressingly familiar...

Same thing happened in the US just a few weeks ago... here's a link to the wikipage for the Upper Big Branch Mine disaster (http://en.wikipedia.org/wiki/Upper_Big_Branch_Mine_disaster) in Virginia from a month ago.

And here are some other related news articles, specifically mentioning this particular mining company.

Union-busting associated with Massey's coal mine disaster
By Carol Forsloff.

Massey forced the unions out, and now non-union coal miners have died in a coal mine cited for 600 violations in the past 18 months, so does the lack of a union contribute to safety concerns?

Some people believe lack of unions is the problem of coal mine safety with respect to Massey and the recent tragedy of 25 miners who died in a West Virginia coal mine and 4 now stranded, left possibly to die because rescuers can't get near them.

Source (http://www.digitaljournal.com/article/290311)

Massey Expects Mine Disaster to Cost $212 Million

April 22 (Bloomberg) -- Massey Energy Co., owner of the West Virginia coal mine where 29 people were killed this month, said it expects a second-quarter charge of as much as $212 million for the accident, more than twice its 2009 earnings.

The costs will include $80 million to $150 million for benefits for families of the miners, rescue and recovery efforts, insurance deductibles, legal and other contingencies, the company said yesterday in its first-quarter earnings statement. The value of the damaged equipment, development and mineral rights is an additional $62 million, the company said.

The April 5 explosion at the Upper Big Branch mine was the worst U.S. mining disaster in 40 years. The operation is closed indefinitely as government officials try to determine the cause. Massey planned to produce 1.6 million tons of metallurgical coal from the mine this year. Net income was $104.4 million last year.

“At first glance, it’s probably a bit higher than we would’ve thought, but it’s reasonable given the situation.” Michael Dudas, an analyst at Jefferies & Co. in New York, said of the cost of the accident.

Massey fell 86 cents, or 2 percent, to $42.93 in New York Stock Exchange composite trading. The shares have dropped 22 percent since the fatal explosion.

Source (http://www.businessweek.com/news/2010-04-22/massey-expects-west-virginia-mine-disaster-to-cost-212-million.html)

Massey shares fell just 2% since the fatal explosion... wow. This is just a 'cost of business' to these guys. :eek:

Edited to add: Sorry, I realize that I misread the last statistic. Shares have fallen 22%.

Michael
May 10th 2010, 07:05 PM
That being said, these coal mines are in a traditionally poor region of the country and overall, I think you certainly will find that the majority of mining done in the USA (and Canada) to be done with a much higher level of safety and responsibility than these nasty coalmines in the Appalachian mountains - let alone coal mines in Russia!

MeMyselfAndI
May 10th 2010, 07:20 PM
That being said, these coal mines are in a traditionally poor region of the country and overall, I think you certainly will find that the majority of mining done in the USA (and Canada) to be done with a much higher level of safety and responsibility than these nasty coalmines in the Appalachian mountains - let alone coal mines in Russia!

Indeed. I think it also has to do with the way government does things. You know, I remember that in the 90s, Russia's miners were much more active. One time, I saw on TV, thousands of them came to Moscow to protest. Just sat down in front of the White House (Government House), and some on Red Square; and banged their helmets on the pavement. And the police did not touch them. Yeltsin was a crazy alcoholic, but he really believed in democracy and people power, that is truth.

Today, they sometimes do that on the highways in the Ural region. But not very often. the government sends paramilitary cops after them; or even the mine bosses, they have their own 'private security teams'... That's probably who killed that poor guy in '03. Bandits. Most of them are from local bratva (brotherhood, mafia).

Michael
May 10th 2010, 07:52 PM
Indeed. I think it also has to do with the way government does things. You know, I remember that in the 90s, Russia's miners were much more active. One time, I saw on TV, thousands of them came to Moscow to protest. Just sat down in front of the White House (Government House), and some on Red Square; and banged their helmets on the pavement. And the police did not touch them. Yeltsin was a crazy alcoholic, but he really believed in democracy and people power, that is truth.

Today, they sometimes do that on the highways in the Ural region. But not very often. the government sends paramilitary cops after them; or even the mine bosses, they have their own 'private security teams'... That's probably who killed that poor guy in '03. Bandits. Most of them are from local bratva (brotherhood, mafia).
I agree that Yeltsin really did believe in democracy. That was his weakness I think.

I don't think Russia was ready for democracy when the USSR collapsed. Russia is getting there now, but democracy is tricky business. If it can't work right, it tends to work very badly. As a student of politics, history and philosophy, I'm a firm believer that Russia must adapt to the market economy first before it can adapt to democracy. That's why I'm a big fan of Putin. I think he has done an 'okay' job of allowing Russia to make that transition.

Don't forget that one of the greatest expansions in private capitalism in the USA occurred due the 'robber barons' of the late 19th century and the 'gangsters' of the prohibition era 1920s. Gangsters are an 'early stage' of property dispersal.

Western style democracy can't function if the state owns all the property. Western capitalism needs to disperse all that property amongst a wide section of the population in order for western-style democracy to bring peace and prosperity. Gangsters are effecient at that important first stage of 'liberating' capital from the state. The second stage is where these gangsters seek to legitimize their ill-gotten gains - they seek to be celebrities and lots of media attention, and buying up foreign sports teams as 'trophies'. The third stage comes after the gangster-moguls when the big fortunes start to break up and dispurse amongst the newly formed middle class.

Anyway, that's my view on the process of turning USSR into a western-style capitalist democracy. That's what is in fact happening as far as I can see. The process takes a couple of decades of course.

The key point is that Russia's original middle class was pretty much wiped out in the 1917-30 period. It takes a while to rebuild a middle class big enough and spread out enough to make democracy work in a place as big as Russia. Until then, the government in power is going to rig the elections and there's likely nothing anyone can do about it (in the short term).