SOME PROBLEMS OF DEVELOPMENT IN COAL MINING EN TERPRISES OF THE KUZNETSK BASIN AND EFFECTIVE SOLUTIONS TO THE PROBLEMS

Seklecova, O.; Ponkratova, T.; Makhova, L.

Abstract:

The article reveals the role and importance of the coal mining industry in the structure of the fuel and energy complex of Russia. It reveals the main problems of the coal mining organizations in Russia, both at the macroeconomic level and at the level of economic entities. The possible ways of increasing the efficiency of the coal industry are investigated on the example of Kuzbass. Russia has one of the world's largest mineral resources potential, which is the basis of guaranteed economic and energy security of the country, meeting the current and future needs of the Russian economy in hydrocarbon raw materials and coal. Currently, the key energy resources in Russia are oil and gas. Oil and oil products occupy 80%, and natural gas -20% in the export of energy resources from Russia. Despite the fact that Russia has significant oil resources, the initial oil reserves have already been depleted by more than 50 %. At the same time, the share of hard-to-recover reserves is constantly increasing, and newly prepared reserves are often concentrated in medium-sized and small fields and are largely hard to recover. The structure of gas reserves in Russia is more favorable than the structure of oil reserves, but there is also a tendency to increase the share of complex and hard-to-recover reserves. In particular, the gas reserves of the basic developed fields of Western Siberia - the main gas-producing region of the country - have been depleted by 65-75% and have passed to the stage of actively falling production. Along with this, the role of coal in the fuel and energy balance of Russia is increasing. Russia has significant resources of coal - more than 4000 billion tons. The dominant share of the resources is steam coal -3641,9 billion tons (89 %) and only 445,6 billion tons (11 %) is metallurgical coal. The main share of the coal resources is concentrated in Siberia (64 %) and the far East (30 %), in the European part of Russia and the Urals (6 %). In recent decades, the functioning of the Russian coal industry took place in the situation of its large-scale restructuring. This is a deep reform of the industry, in the result of which it was transformed from a planned and unprofitable to an effective sector of the fuel and energy complex of the market economy. The main objective of the restructuring of the country's coal industry over the past years of reforms was to ensure the transition of the industry from a loss-making and uncompetitive to an industry, consisting of coal companies, competing with each other and operating without budget subsidies. The other objective was to reduce social tensions in the coal industry. The unfavorable factors for the coal mining industry are revealed: high costs for coal transportation through the territory of Russia, the rise in the cost of equipment due to the ruble devaluation, difficulties in attracting investments in the conditions of sanctions, the fall in demand and prices for coal on the world markets. Therefore, the vital task for coal enterprises is to reduce costs in the extraction and transportation of raw materials, as well as the development of the technologies for coal enrichment and processing. Kuznetsk coal basin or Kuzbass is one of the largest coal deposits in the world, located in the South of Western Siberia, mainly in Kemerovo region. Today Kuzbass is rightfully the leader among Russian regions in terms of coal production. The region produces 60% of all production or about 80% of metallurgical coals. Coal mining of Kuzbass is in a particularly unpleasant situation. Kuzbass is 4500-5000 kms away from the ports of the Baltic and Black seas , 6000 kms away from the Pacific ports. This is a great distance. According to the fuel and energy Department of Kemerovo region administration, transport costs for the delivery of the coal reach 35-40% of the final price. Despite this, the productivity of Kuzbass miners has increased more than three times in recent decades. According to experts ' forecasts, there will be an inevitable increase in coal production in the basin in the near future and the level of coal production will have reached more than a quarter of a billion tons by 2025. Naturally, this growth of the industry will lead to the development of the rail transport and other infrastructure linked to coal mining. The commissioning of the new facilities and the maintenance of the existing enterprises need substantial investment. Only the commissioning of the new coal mining enterprises (it is planned to build 20 coal mining enterprises and 6 open-pit mining sites at the existing enterprises) needs 131.7 billion rubles. Production capacity maintaining needs more than 400 billion rubles. The construction of the new coal processing plants requires 49 billion rubles. However, in the near future, the coal companies of the region will face an alternative between technological development and extensive increase in coal production. Improving the efficiency of the processes is one of the key strategic directions for coal industry development not only at the level of Kuzbass, but also in the Russian economy. The critical analysis of the coal mining enterprises efficiency allows to find new growth points. This, in turn, leads to the improvement of such indicators as profit, profitability. It is also important to find solutions to the current problems without significant investment. The important problem in the context of this issue is to build an effective subsystem of internal control, as one of the key components of the overall enterprise management system. Without belittling the importance of the other subsystems of the enterprise management (planning, organization, accounting, coordination), the authors pay attention to the functioning of the internal control system at the enterprises of the coal industry. The introduction of the internal control system, which is aimed at solving the challenges facing the enterprise management to improve the efficiency of production and economic activity will improve economic, financial and other indicators. The article investigated the current state, construction and functioning of the internal control system at the enterprises of the coal industry, and identified disadvantages in its functioning. At present, there are no clear recommendations regarding the establishment of the effective internal control system. The organization of the internal control is complicated due to the wording vagueness of the content of this type of control in regulations, as well as the lack of guidelines for its implementation. According to the international auditing standards, internal control includes the following components: control environment; enterprise risk assessment process, information systems, including related business processes linked to financial reporting and information exchange; control procedures, control monitoring. This heterogeneity and diversity of the elements do not allow a clear definition of the relationship and interdependence between them. Internal control should be exercised at all levels of the enterprise management. There are no clear recommendations on this issue. This leads to an increase in the cost and tax burden. There is no unambiguous methodology for assessing and analyzing the effectiveness of the internal control in domestic and foreign literature. The methodology of the internal control implementation, as well as the method of assessing its effectiveness are not legally established and are the subject of research by many scientists and specialists. The modern approach to the organization of the internal corporate control provides not only control over the implementation of planned indicators and ensuring the reliability of the accounting (financial) statements of the corporation, but also the identification of risk factors that can affect the financial stability of the corporation. The research revealed, that today the enterprises of the coal industry of Kuzbass need establishing an internal control system, as one of the conditions for the functioning of the management system. It is determined, that through an effective mechanism of the functioning of the internal control system, enterprises will be able to ensure: rational use of their own assets, their preservation; prevention of fraud;compliance with the requirements of the current legislation in the implementation and documentation of economic operations;timely assessment of weaknesses and risk areas of the enterprise and reduce their impact on the activities of the enterprise;constant search for reserves to improve the efficiency of activities

SGEM Research areas:

• Exploration and Mining

Year:

2019

Type of Publication:

In Proceedings

Keywords:

coal industry; efficiency; internal control system; growth of the Russian economy..

Volume:

19

SGEM Book title:

19th International Multidisciplinary Scientific GeoConference SGEM 2019

Book number:

1.3

SGEM Series:

International Multidisciplinary Scientific GeoConference-SGEM

Pages:

603-612

Publisher address:

51 Alexander Malinov blvd, Sofia, 1712, Bulgaria

SGEM supporters:

Bulgarian Acad Sci; Acad Sci Czech Republ; Latvian Acad Sci; Polish Acad Sci; Russian Acad Sci; Serbian Acad Sci & Arts; Slovak Acad Sci; Natl Acad Sci Ukraine; Natl Acad Sci Armenia; Sci Council Japan; World Acad Sci; European Acad Sci, Arts & Letters; Ac

Period:

30 June - 6 July, 2019

ISBN:

978-619-7408-78-2

ISSN:

1314-2704

Conference:

19th International Multidisciplinary Scientific GeoConference SGEM 2019, 30 June - 6 July, 2019

DOI:

10.5593/sgem2019/1.3/S03.077