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38 E&MJ; • JUNE 2014 www.e-mj.com NEWS - THIS MONTH IN COAL Turkish Authorities Investigate the Soma Mine Disaster In the wake of Turkey's worst mine disaster, authorities began to investigate the situa- tion as anger spread among the general public. Rescuers recovered the remaining bodies on Saturday, May 17, bringing the final death toll for the Soma mine disaster to 301. Authorities detained 25 people for questioning and charged several with negligence, including General Manager Ramazan Dogru and the mine's Operations Manager Akin Celik, according to Turkey's Dogan news agency. Controversy over Prime Minister Recep Tayyip Erdogan's response to the tragedy refuses to blow over. Conflicting reports emerged as to what caused a mine fire and trapped miners underground. Some sources reported an explosion, while others pointed to a mal- function with the mine's electrical distri- bution system, igniting a blaze. The mine's shaft and ventilation system lost power. At the time of the incident, nearly 800 people were underground and author- ities said most deaths have been carbon monoxide-related. Owned by Soma Komur Isletmeleri AS, a subsidiary of the Soma Group, the asset lies about 300 miles southwest of Istanbul. In an email message quoted by Bloomberg , officials at the Soma Group said the inci- dent took place despite the "highest safety measures and constant controls" and that an investigation is under way. Meanwhile, protestors furious over lax government reg- ulations encircled Erdogan's car, prompt- ing him to shelter in a nearby store, accord- ing to Hurriyet newspaper. Riot police also broke up rallies at company headquarters in Istanbul and Ankara. Although mining accidents are frequent in Turkey, with more than 100 deaths report- ed since 2003, this incident is approaching the single "highest loss of life." Prior to the incident, Soma's website called itself Turkey's largest underground coal producer—producing 5.5 million tons per year—and that its Soma mine pro- duces 250,000 tons a month (t/m), most- ly supplied to a local power plant. Since then, however, the site has been taken down and replaced with a single message expressing condolences. In a Q3 2012 interview with a Turkish newspaper, Alp Gurkan , the owner of Soma Holding, said his company had low operat- ing costs, and outperformed estimates by state-run Turkiye Komur Isletmeleri, or TKI from which it purchased the asset in 1984. TKI had estimated Soma would cost $130-140 a ton to mine, while Gurkan's company committed to $23.80 per ton, including a 15% royalty fee paid to TKI. During the rescue operations, Labor Ministry officials, quoted by state-run news agency Anadolu , said the mine has been subject to five inspections since 2012 and, as of last month, no safety violations were reported. More recent reports say that inspectors rarely traveled underground and, when they did, they were shown the best parts of the mine. Queensland's Coal Business Treading Water Around one quarter of Queensland's coal production is in the red, according to the latest industry data provided to Treasurer Tim Nicholls in the lead-up to the June state budget. The bleak outlook headlines a Strong Choices submission from the Queensland Resources Council (QRC), compiled with the assistance of independ- ent economic consultants, Wood Macken- zie and Lawrence Consulting. "Despite vigorous cost cutting, 25% of the coal currently produced in Queensland is being done so at a loss, including half of all thermal coal production," said QRC Chief Executive Michael Roche. "Some of these mines are only staying open because production is a more palatable option than closing operations locked into transport costs levied on a take-or-pay basis. "However, with 1 out of every 10 tons of coal currently produced in Queensland in the red to the tune of more than $14, some mines are at extreme risk of shut- down," Roche said. "If that happens, Queensland could lose up to $1.8 billion in spending with more than 22,000 jobs in the line of fire." The QRC submission said that from a public interest perspective, increasing state-based taxes such as royalties is the least desirable option for the state government to return its budget to sur- plus and retire debt. "Given the govern- ment's need for significant and prompt revenue flows to stabilize debt levels and lower state borrowing costs, the QRC sup- ports the government's proposal for select- ed sale or leasing of assets, subject to appropriate regulatory and commercial safeguards being discussed with industry and implemented prior to divestment," Roche said. Rescuers bring victims to the surface at the Soma mine, where 301 miners died. EMJ_pg04-45_EMJ_pg04-45 6/4/14 9:00 AM Page 38