“What’s happening with the coal mining industry today reminds me of the 1990s, only now it’s in conditions of armed conflict,” Kostyantyn Ilchenko tells me. By the “1990s”, Ilchenko means the chaotic restructuring and funding problems that gripped Ukraine’s mining industry after the Soviet collapse.
Ilchenko experienced this firsthand. In 1997 he took out a lease on an abandoned mine (“Maiska”) in eastern Luhansk. With a contract from the state-owned Sverdlovantratsit company, Ilchenko rebooted operations at the Maiska mine and signed a contract with an investor. But he soon discovered that Leonid Kuchma’s government had ordered the closure of several mines on the pretext of “restructuring” the coal industry.
According to Ilchenko, the main aim of this exercise was to appropriate the funding allocated for it. In practice, restructuring often meant the closure of potentially profitable mines, while assets and equipment were sold off — leaving mines at risk of flooding and other problems.
