Experts from the Organised Crime and Corruption Reporting Project estimate there are tens of thousands of these workers in about 2500 illegal pits or ‘kopanki’ throughout Ukraine.
Most of them are in the protest-ravished Donbas region near Donetsk.
Before Viktor Yanukovych was ousted, the number of pits and illegal workers was on the rise, some believe with the quiet approval of authorities, many of whom are still linked to Yanukovych.
Illegal miners receive little pay and work in dangerous conditions. Meanwhile, a group of businessmen close to the former president have benefitted hugely at the miner’s expense, according to the report.
In June, MP Oleh Medunytsia submitted a bill calling for an investigation of corruption related to illegal coal mining.
“It’s clear that such massive-scale legalisation of illegally extracted coal cannot happen without a state component in this scheme,” the draft law reads.
The call for an inquest was triggered when state-owned and private coal mines reported extracting up to 61.1 million tons of thermal coal in 2012. But the state railway company Ukrzaliznytsia reportedly transported 66.9 million tons during that time.
The 5.8 million ton difference, Medunytsia said, represented illegally extracted coal.
Coal miners’ trade unions estimate that the actual amount is closer to 6 to 7 million tons.
With the 2012 average price for coal at about $100 per ton, the annual output of illegally mined coal would be worth $700 million.
At those estimates, illegal coal accounted for around 11% of Ukraine’s annual output.
OCCRP identified several routes by which coal dug from illegal pits is “laundered” into legal coal. The routes lead through state-owned mines, coal enrichment plants and shell companies.
In the proposed law to investigate the issue, Member of Parliament from Luhansk, Volodymyr Landik said that Sverdlovantratsyt, a state-owned coal company continued to buy coal of uncertain origin and sold it through another company Vyhillya Ukrainy, as if it were legal coal.
In the first quarter of 2008, $22 million in illegal coal was sold. At the same time, 200t of Sverdlovantratsyt’s own coal was stockpiled in its warehouses, according to the report.
