Kolubara lignite is still the energy security pivot of Serbia says Kolubara mines company CEO

19. April 2013. / Uncategorized

Without MB Kolubara as the most essential part of EPS, whether someone wants to see it or not, there is no stability and no power future of Serbia. In order for the Kolubara lignite to continue “lighting up” every other bulb in the country, it is necessary to invest 120 to 150 million euros in the coal mines annually, says Mr. Milorad Grčić, the Director of MB Kolubara.

The strategy for the development of the Mining Basin Kolubara has been run in a rather disorganized way over the past ten years. But what’s done is done. One such company cannot be crossed out because the coal is regularly mined and transported to thermal power units. Thermal power plants worth nothing without the mines. Without MB Kolubara as the most essential part of EPS, whether someone wants to see it or not, there is no stability and no power future of Serbia. Now we plan to open the mine Radljevo, to ensure stability in the coal production and population electricity supply. Kolubara lignite is a key factor in the fact that Serbia has enough power because its energy “lights up” every other bulb in the country, said Mr. Milorad Grčić, the Director of MB Kolubara in an interview for Balkan magazine.

It seems the role of Kolubara lignite in the electric power balance of the country has been taken for granted so far, so that MB Kolubara was a bit swept under the rug in relation to other parts of EPS.  Has anything changed since you came to the leading position of Kolubara?

It is good that the top management of the company is aware of that. Electric Power Industry of Serbia, regardless of all the difficulties and worsen financial aspect, is showing understanding of MB Kolubara, as evidenced by the fact that recently besides me, as the director of this company, the contract on the loan and purchase of mining equipment with the German company Thyssen Krupp and Polish consortium Kopex for the future Kolubara open pit mine, Field C, was also signed by Mr. Aleksandar Obradović, managing director of EPS.

We cannot turn our heads anymore and pretend not to see that there are various interest groups and various lobbies. It is known to all of us very well. And, exactly because of that, there is no letting-up. Kolubara is the core of the system. Not only by number of workers but also by the amount of coal, which is excavated here over the year and spent for the electricity generation in thermal power plants of Obrenovac.  If 52 to 54% of the total electricity in Serbia is annually produced from Kolubara lignite then, everything is clear. In addition, it should be noted that the Kolubara has 10,000 workers. With companies that have been excluded from the system as non-core activity in the previous years, we are cooperating by constantly hiring another 7,000 workers. So, 17,000 families live from Kolubara.

In order to construct new thermal power plants, it is necessary to provide sufficient coal for their operation. Do you have new estimates prepared? Which mines need to be opened? How much money is needed?

According to our estimates, there is sufficient coal of course, and we expect for the exploitation of coal to last until 2060, and quantitatively speaking it is 2 million tons of coal. However, in order to have it realized according to the plan, it is necessary to open new mines: Field C, Field E, South Field and what is most important for the country’s energy security, opening the Field Radljevo The first step in the complex plan of expansion of the open pit mines is naturally, expropriation that is in progress. For the realization of the plan, the investments of 120 to 150 million euros are needed, per annum. These are funds required to the procurement of the new equipment, but also for the needs of expropriation and major infrastructural projects. Some funds will be provided by making savings in business operations, but it is necessary to take non-commercial loans too.

The open pit mine Radljevo is therefore, a precondition for the new thermal power plant.

Yes, this open pit mine is required to the future thermal power plant Nikola Tesla B3 at Ušće (Confluence). At the same time, we are shutting down the unit 1 and 2 at the thermal power plant Nikola Tesla A. I would like to point out that the capacity of the power unit TPPNT B3 will be higher than these two units that are being shut down.

You have recently said that the priority of MB Kolubara in 2013 is proceeding with the expropriation. Your predecessors announced the same, but obviously little has been done in that regard. What seems to be the problem? Is it the money, the malversations or the fact that EPS and the State do not have the energy development strategy clear enough?

In order to have quality expropriation implementation, it is necessary to fit in several factors, and by all means the first and foremost is the money, but I think that strict obeyance to the Expropriation Law, efficient, rational and economical implementation of the Law is very much relevant, and territorial priority regard is of utmost importance. The biggest problems occurred because of unprincipled expropriation implementation and having no regard of territorial priority. High sums of advance payments have been paid out to the households from the third zone of priority, and it is questionable whether this entire territory will ever be needed for mine expansion. And also, the households from the first zone have not been paid out, and they are at the first line of mine expansion.

We are doing our best to return this situation into standard frameworks and that this process does inflict damage neither to Kolubara nor to the citizens who have to be resettled.

Up to now, the expropriation was mostly delayed for various reasons concerning the projected deadlines. Do you have the support of Minister of Energy, prof. Dr. Zorana Mihajlović so that this process would not hinder future operation of the excavators?  

Absolutely. We have the absolute support.

Earlier on, the Kolubara miners claimed that EPS paid for a ton of coal at a price less than a bottle of beer.  Do you believe that the corporatization will help the ton of coal get its real price? 

The electricity price is still a social category; therefore the coal price is as such. When we enter the market as a part of EPS system, we can expect the price will also change.

After nuclear disaster in Japan, the lobby for shutting down nuclear power plants is getting stronger in Europe, and therefore the coal-fired thermal power plants are growing more popular again. However, in Germany, for example, “black gold” travels in special “tunnels” from the coal pit mine to thermal power plants. How much is Kolubara behind the modern coal mines? 

For years we invested only in thermal power plants, and MB Kolubara was unfairly neglected, so its recovery is now necessary. Nevertheless, I have to tell you that our machinery differs from field to field. In some fields we have the stateof art systems which are, according to the information I got from our experts, equal to those in Germany.  However, the machinery operating in some other fields is 40 years old, so refurbishment is necessary thereof.

 When can we expect the environmental modernization of Kolubara open pit mines to take place?

One of the things that lead to modernization is the green loan that leads to coal homogenization, which includes the entire sensor systems and quality “readers” which, mixes the coal at the end, so that the coal of uniform quality comes to the thermal power plants. The amount of pollutants, soil, mud and sand will be reduced in the coal simultaneously, so that the emission of the hazardous gases will be reduced in TPP, which are now being emitted during the coal combustion.

The other environmental phase is related to the coal drying in Vreoci. We hope that we will manage to call a tender for the Branch “Processing Plant”.  Our goal is to eliminate hazardous gases and odours that arise in the process of coal drying.

During his visit to Belgrade, the president of Gazprom, Alexey Miller, announced the construction of gas power plants. Are you afraid of the competition from the natural gas, which is environmentally more suitable for usage than coal? 

No, absolutely not.

 What can you single out as a primary task since you have come to the leading position of MB “Kolubara”?

The most important task is to ensure the stability of energy in the country, given that we are the leading coal producer in Serbia. I also want to make clear the following: every other light bulb in Serbia shines thanks to us. We plan to keep it that way, so in order to realize this primary goal, this and the  following years have to be the years of the higher investment cycles in the contemporary history of MB Kolubara.  The investments in new production facilities are necessary, as well as the rehabilitation and overhauls of the existing capacities, improvement of the production, resolving of the long-standing problems, expansion of the open pit mines, fair and duly expropriation, rationalization at all levels. If we want all this to be well implemented, we must take into account the working conditions in the open pit mines and  occupation safety system, since most workers are miners, who bear the heaviest burden and the most important part of the work in this company. And, we all have to be at their service.

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