Lack of funds could spell catastrophe for disused mines

The state is CZK 1.4 billion short of funds to help take care of old coal and uranium mines. The acids from uranium mines in Stráž pod Ralskem could contaminate the surrounding area.

Just a short while after Finance Minister Eduard Janota was able to secure a fragile agreement on the state budget for next year, more expenses are cropping up. The Industry and Trade Ministry is asking for CZK 1.4 billion in subsidies for the state companies Diamo and Palivový kombinát Ústí (PKÚ).

“It is essential that we get this money. We won’t be able to get by without it,” says Zbyšek Sochor, head of Diamo’s adivsory board. But Janota says, “The money isn’t there.”

Diamo and PKÚ have been tasked with repairing environmental damage caused by mining. They look after closed-down mines, ensure that combustible substances like methane aren’t leaking out and clean water in mines. In Stráž pod Ralskem, for example, 5 million tonnes of sulphuric acid remains underground, left over after uranium mining in the area. Diamo pumps out water that contains the acid. “Without sufficient funds the company would be unable to continue with the cleaning process. The acid could then contaminate to areas, which would be very difficult to clean up in case of large-scale contamination. Underground springs could be contaminated, poisoning the local population with dangerous substances such as radionuclides,” says Environment Ministry spokesman Jakub Kašpar. “It would mean an environmental catastrophe,” says Diamo director Jiří Jež.

The Industry and Trade lacks CZK 1.15 billion for Diamo and 250 million for PKÚ. Diamo alone needs a CZK 3 billion subsidy a year just for the most basic maintenance. The company is still mining uranium in Vysočina, but the revenues from that operation are not sufficient to cover the expenses of maintaining closed-down mines. For years the company was in the red. But two years ago, thanks to rising uranium prices it began making a small profit. But the price of uranium is falling now and the pre-crisis profits will not return anytime soon. The market is being flooded with uranium from new mines in Kazakhstan and Africa.

“Without that billion, we are not able to cover the costs of maintaining old mines. I can’t imagine that the money simply isn’t there. We need to find a solution,” says Jež, who notes that to be able to fully remove the damage caused by mining the company needs more than CZK 3 billion. “Each year the subsidies are lower. In the past we used to get CZK 4 billion. Now we are doing just the bare minimum,” says Jež.

The company has already reached into its savings. This year it laid off 300 workers, and last week it gave out the last 60 notices. Sources from the ministry warn that the insufficient subsidies could mean the sacking of an additional 800 people.

Sochor says he hopes that the Industry and Trade Ministry will get the necessary funds from the CZK 37 billion that former PM Miloš Zeman promised to provide for the development of the Moravskoslezsko, Ústecko and Středočesko regions.

“Only CZK 10 billion of that money has been spent so far,” he says. But it’s a virtual amount. The fund, which, according to Zeman’s plans, was to draw money from the privitasion and from the shares of companies like ČEZ and ČEPS, is empty. The profits generated by state companies have been spent elsewhere.

Janota told HN last week that the money is not there. “We used the reserves meant for Diamo to help support the state-owned insurance company EGAP. There is no other sources.”

“I know about [the finance minister’s] stance, but we will try to negotiate with him,” says Industry and Trade Minister Vladimír Tošovský. The environment minister, meanwhile, wants launch a discussion about the risks associated with neglecting to clean up discontinued mines. According to information available to HN, the cabinet will discuss this problem in November.

Diamo