Chelyabinsk fever of Konstantin Strukov
Konstantin Strukov, the Vice Speaker of the Legislative Assembly in the Chelyabinsk Region and one of the richest people in the Urals, has many accomplishments. For example, creation of an environmental disaster around the Korkinsky coal pit, making lives of his employees a sheer hell, and forcing them to go on hunger strikes.
Armageddon in the Urals
The name of Konstantin Strukov is dreadful for many residents of the Chelyabinsk Region but most of all – for people living in the Korkino district. The Korkinsky coal pit (second largest in the world) inflicts enormous harm to the environment of the whole region, but the people of Korkino are the primary victims of this giant enterprise. Coal has been actively mined there since the 1930s, and by the 1990s, only residual deposits remained in the pit. However, these residual deposits were sufficient to make Konstantin Strukov, the Head of the Chelyabinsk Coal Company, one of the 100 richest people of Russia. The billionaire is also the Founder & President of the UGC Gold Mining Company, which will be addressed in more detail below.
In the end of the 1990s, Strukov, then-Director of Chelyabinskugol’ Open Joint Stock Company mining coal in the Korkinsky coal pit belonging to it, started an optimization of the company. As a result, pretty soon Strukov has become the owner of Chelyabinsk Coal Company, which quickly acquired – with support from Strukov – the largest coal pit. A subsidiary company of Chelyabinskugol’ was managing this pit. This asset of Chelyabinskugol’ was used as a security to receive a credit in Urikom-Bank – and the multi-billion coal mine was estimated at only 302 thousand rubles. Of course, the ‘optimized’ Chelyabinskugol’ hadn’t repaid the loan – and the Korkinsky coal pit was immediately sold to some Spektr-Biz company and then, through a chain of resales, became a property of the newly-founded Chelyabinsk Coal Company Open Joint Stock Company. Then, for more than ten years, coal had been actively mined there. But any deposits are ultimately being depleted.
By 2010, the production of coal dropped: the upper layers were depleted, and Konstantin Strukov, a long-term
Deputy of the Legislative Assembly in the Chelyabinsk Region, was not willing to invest funds into deep mining. In addition, a major explosion occurred on Korkinskaya mine in 2009. Since then, the situation with the coal pit started escalating. In 2012, Vladimir Putin visited
a nearby Roza settlement, which already was in a poor shape. Following a Presidential instruction, resettlement of residents has been initiated, but the allocated 4 billion rubles were not sufficient – mainly because Strukov, who promised to invest 1 billion rubles into the resettlement of Roza dwellers, has not provided a penny.
Current condition of Roza settlement
In 2013, Chelyabinsk Coal Company Open Joint Stock Company has discharged into the atmosphere a record amount of pollutants – 11 tons – during only five months. The continuos erosion of the rim surrounding the giant pit may cause collapse of houses in Roza any time. Spots of spontaneous combustion appear in the pit on a regular basis. The Environmental Prosecutor’s Office had fined Chelyabinsk Coal Company many times – but what is a fine of 50 thousand rubles for a company earning billions? Still, Strukov managed to turn this issue to his advantage: Chelyabinsk Coal Company Open Joint Stock Company proposed to drown the pit. This would eliminate the threat of spontaneous combustion and make the costly remediation unnecessary.
Smoldering Korkinsky coal pit
Roza residents go on hunger strikes and collect signatures under requests to remediate the pit – but all their efforts are fruitless. From the other side, Konstantin Strukov is very active. In 2015, the billionaire owning one of the dirtiest enterprises in the region has become the Chairman of the Committee for Environment and Nature Use of the Legislative Assembly of the Chelyabinsk Region. At the same time, Strukov is steadily pushing the Chelyabinsk Coal Company Open Joint Stock Company towards bankruptcy. The only purpose of this deliberate bankruptcy is to avoid paying 20–35 billion rubles for the remediation. Strukov would like the federal budget to cover this cost. According to Compromat74.ru, Strukov managed to incorporate the reinstatement of the “Liquidation of Sites of Accumulated Environmental Damage” program into the Agenda of the Days of the Chelyabinsk Region in the Council of Federation of the Federal Assembly of the Russian Federation – and of course, he will do everything to incorporate the Korkinsky coal pit into this program.
People die for the metal
As said earlier, Konstantin Strukov is also a major gold miner. The reputation of his UGC Gold Mining Company is not better than that of the Chelyabinsk Coal Company. The UGC uses cyanides in gold mining at a dangerous scale. In 2013, the Environmental Prosecutor’s Office of Magnitogorsk has found the UGC Gold Mining Company guilty of mass fish mortality in the Kurasan River. Toxic wastes containing, in addition to cyanides, catastrophic amounts of mercury, zinc, and copper had been discharged into the river. The company of Konstantin Strukov had to pay a huge fine of 35 thousand rubles.
Mass fish mortality in the Kurasan River
In the end of 2014, the Environmental Prosecutor’s Office of Magnitogorsk has identified a whole bunch of violations. The company of Konstantin Strukov had blatantly breached many articles of the environmental legislation, including illegal diversion of the Chernaya River and storage of high-toxic waste in the open air. The penalty was truly impressive – a fine of 10 thousand rubles.
Not only the Environmental Prosecutor’s Office has issues with the UGC Gold Mining Company. Only in 2015, three workers died in mines of the company belonging to Strukov: one in February and two in November. In both cases, the company management and personally Konstantin Strukov, protected by the Deputy’s immunity, did not incur any liability. Workers who manage to survive in the situation of overwhelming violation of safety rules do not receive their wages for months. The Plast City Court of the Chelyabinsk Region has dozens of lawsuits against the UGC Gold Mining Company due to non-payment of salaries.
Contractors of the monstrous holding company are in the same situation. The UGC Gold Mining Company refuses to pay its contractors amounts that are neglectable for it. For example, Yuzhural Monitoring had to file a lawsuit to collect 53 thousand rubles from the UGC. The debt of the UGC Gold Mining Company to Poleos company – also collected in court – was 200 thousand rubles. The archive of arbitration cases includes dozens of lawsuits against various structures of the UGC. Most of the claims do not exceed 1 million rubles. Accounting books of UGC Gold Mining Company demonstrate huge profits – so there are no real reasons for these numerous small debts.
In his interviews, Strukov proudly states that he does not transfer his assets to offshore companies. However, as of the last year, 99% of the UGC Gold Mining Company belonged to a Cyprus-based UGOLD Limited. By now, Strukov has redistributed his assets, and currently UGOLD Limited owns only 5% of the UGC. But accounting reports of the UGC Gold Mining Company show that its profits are growing – while the net assets decreasing year by year. The assets are vanishing because of huge loans taken by the company. Apparently, the above-mentioned UGOLD Limited is the main creditor of the UGC Gold Mining Company.
A while ago, Konstantin Strukov had commented the eternal striving of the business to get into the circles of power as follows: “A wealthy man would never think of profits, but instead would focus on law making”. The 16 years of his work as the Deputy demonstrate just opposite. Apparently, Konstantin Strukov has contracted a gold fever. And it is unlikely to find a cure for it any time soon.
Initially, the defendants in the case had been charged with embezzlement through swindling in the amount of 225 million rubles ($3.3 million). In the final version of the indictment, the article was changed to 1.5-billion-ruble ($22.45 million) embezzlement.