The Black Market of B.C. Coal Miners
As B.C. coal miners expand into places like Mongolia and Indonesia – where costs are lower and political climates more welcoming – questions are being raised about the associated environmental and social toll – and who, if anyone, will be picking up the tab.
Like many who live in densely populated Indonesia, Sujatiyo dreams of space and privacy. The 36-year-old coal mine employee sheepishly describes his ambition to own a home for his family of four, a simple wooden structure that would allow them to move out of his mother-in-law’s small house with its 15 occupants – an aspiration so improbable that he glances at his brother-in-law with embarrassment as he speaks. For seven days a week, Sujatiyo works a 10-hour shift at a coal mine a one-hour motorbike ride from Tering, his village on the bank of the Mahakam River on the resource-rich island of Borneo. Today, a Muslim holiday of thanks, is his first day off in six weeks. For his efforts, he takes home about $300 a month.
Despite his abysmal wage, Sujatiyo is fortunate – and he knows it. In recent years, jobs have dried up as nearby gold and coal deposits are exhausted, leaving many in Tering unemployed. But his luck is coming to an end; Sujatiyo’s company, Thai-owned Bampu Public Co. Ltd., is set to wrap up operations at the end of the year, and he will soon join the jobless, rendering his dream of home ownership even more unlikely. “It is always in my head,” he says. “It is a burden.”
Now Sujatiyo’s hopes for employment rest on Canada, on a B.C. company developing a promising new coal mine seven hours by boat upriver. According to Vancouver-based SouthGobi Energy Resources Ltd., the Mamahak project, named after a nearby village where indigenous Dayak people live, could break ground as early as the first quarter of 2009 – news well received by locals who have never known a job market not plagued with chronic unemployment.
The Mamahak site is slated to be SouthGobi’s second coal mine, following its flagship Ovoot Tolgoi mine in Mongolia, which produced its first million tonnes of coal in late November 2008. The two sites being developed by SouthGobi – a relatively new company controlled by majority shareholder Ivanhoe Mines Ltd., also based in Vancouver – have an obvious similarity: proximity to China, the market that’s leading Asia into a coal boom with its rapidly growing demand for energy and insatiable appetite for steel. Add to the mix countries such as India – where coal consumption has doubled since 1991 and where the Delhi government plans to increase electrical generation capacity by 50 per cent by 2012, mostly by burning coal – and you’ve got the ingredients for an Asian coal rush. Asian coal production has grown by an unprecedented 80 per cent in the past decade, a boom that has attracted prospectors from all over the world, including from B.C. In the meantime, European and North American coal production has flattened or even slightly declined as coal power, seen as being dirty, has fallen out of favour among Western politicians and the public.
While there is still an abundance of high-quality coal in the ground in B.C., companies such as SouthGobi are drawn to politically unpredictable developing countries such as Mongolia and Indonesia that offer substantially lower production and transportation costs. Some miners are also drawn, say critics such as MiningWatch Canada, to parts of the world where environmental and social standards are considerably more lax than they are in North America and Europe. While financial institutions and governments, including Canada’s, are considering ways to hold companies to the same standards expected at home, the recent collapse of commodity prices – and the ensuing financial pressure that’s put on mining companies – may see those initiatives shelved indefinitely. For Sujatiyo, the global economic crisis is far from his immediate concerns. He hasn’t heard about recent gyrations in coal prices and doesn’t know where the coal from his mine is sold or what it’s used for. He just needs a job. But he is aware that workers elsewhere are better off and asks eagerly whether Canada has a welfare system for the unemployed. “Ten years after this, Indonesia will be paying for the jobless person,” he proclaims optimistically as the conversation turns toward whom he will vote for in the approaching regional election (apparent from colourful political flags all over Tering). “The destiny of this country is in my hands.” Then the call to prayer rings out from loudspeakers in the small mosque nearby and the interview comes to an abrupt end; it’s time for Sujatiyo to go pray in thanks.
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