15 May 2018

The fight against absurdity takes years

Maxim Dovgyallo, Adviser to SUEK’s CEO:

Each year Russia generates enormous amounts of waste, but 90% are what is not considered waste in other countries, namely, overburden and enclosing rocks. This puts the Russian Federation in a disadvantageous position. Other countries are beginning to perceive us as a global environmental polluter, as a country that does not care about the environment, which not only harms our reputation, but also raises obstacles, including of an economic nature. Our industrial enterprises are considered dirty, and under current conditions, this is fraught with the introduction of restrictive measures.

Various approaches to remedy the situation are primarily implemented by our relevant ministries: the Ministry of Natural Resources, the Ministry of Energy and the Ministry of Industry. A big step has been taken this year when, after four years of discussion, a federal law was finally drafted removing the ban on using ash and slag waste for the purposes of reclamation of land and mine closure (both underground and open mines – Vedomosti).

The use of overburden and enclosing rocks of hazard classes 4 and 5, as well as metallurgical waste for mine closure was allowed three years ago. However, each year we generate about 30 million tonnes of ash and slag waste of hazard classes 4 and 5, totalling an amount of approximately 2 billion tonnes, which is not allowed to be used for these purposes. What does it mean? When extracting minerals through open pit mining, we dig a hole. In order to fill this hole, we can use overburden and enclosing rocks, but since we have extracted all the minerals, the hole cannot be completely filled with such rocks. Therefore, we start digging another hole to extract minerals and fill the previous one. This produces a spiralling effect: the more land we reclaim, the more new holes we dig, thus increasing the number of objects that need to be reclaimed.

Last year the opinion of business representatives, who had repeatedly pointed out the absurdity of the situation, was finally heard, and the preparation of a draft federal law followed. Unfortunately, it was prepared by the Ministry of Energy, rather than the Ministry of Natural Resources. The draft law was approved by all federal executive bodies and agreed with the Ministry of Justice. Then the Presidential Administration suspended it on the grounds that it did not solve the problem in a comprehensive manner. The Administration's argument was as follows, ‘Yes, you are right when saying that these types of waste should be drawn into economic circulation. But your solution is not ambitious enough. It is necessary to revise the legislation in a radical way, particularly by excluding overburden and enclosing rocks from the concept of waste. If we use them for the purpose of mine closure, how can they be waste? They are not disposed of, but used as a tool to eliminate environmental damage.’ The law was returned for revision.

In March, an agreement was finally reached with the Presidential Administration. The final version of the draft law was approved enabling the use of ash and slag waste, overburden and enclosing rocks, as well as coal and ore processing waste of hazard classes 4 and 5 for mine closure and the reclamation of disturbed land, which has significantly expanded the list of available tools.

At present, the final revision of the draft law is in progress. It has been coordinated with all relevant agencies. We expect that next week the Ministry of Energy will submit it to the government. And, we very much hope that this long-awaited bill will be passed in the near future, best of all – in the spring [parliamentary] session.

The text has been prepared based on the presentation at the Environmental Modernisation of the Production and Industrial Sector of the Russian Economy conference, held by the Vedomosti newspaper in Moscow on 4 April 2018.

Maxim Dovgyallo

Graduated from Bauman Moscow State Technical University, Institute for Retraining and Advanced Training of the Financial Academy under the Government of the Russian Federation, completed a training programme for the top management succession pool in the Russian Presidential Academy of National Economy and Public Administration. Worked in the banking sector, in financial divisions of large companies (Rosprom, YUKOS), headed Commercial Property Debt Financing at the Institute for Urban Economics. In 2002-2004, Head of the Corporate Relations Office in SUEK and MDM Group, then Head of the Corporate Relations and Control Department of SUEK. Adviser to SUEK’s CEO since 2006.

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