By Denys Kazansky and Serhiy Harmash

Illegal coal mining, a multimillion-dollar shadow industry, has become a curse on the Ukrainian economy and workers but a blessing for its few profiteers.

An investigation by the Organized Crime and Corruption Reporting Project (OCCRP) has found that companies linked to former government officials and to businesses owned by the son of former President Viktor Yanukovych routinely legalized and sold black-market coal -- stealing jobs from legitimate miners and endangering workers toiling in unregulated and illegal pits.

Industry experts estimate that there are tens of thousands of these workers in some 2,500 kopanki or illegal pits around Ukraine, mostly in the protest-wracked Donbas region around Donetsk.  Before the ouster, the numbers of pits and of workers were rising, some say with the quiet approval of authorities, many of whom are still tied to Yanukovych.

While the illegal miners work, they get little pay and work in very dangerous conditions.  Meanwhile, a group of businessmen close to the former president has benefited handsomely at the miners expense.

It was nearly a year ago, in June of 2013, when Member of Parliament Oleh Medunytsia submitted a bill calling for investigation of corruption related to illegal coal mining. “It’s clear that such massive-scale legalization of illegally extracted coal cannot happen without a state component in this scheme,” the draft law reads.

He explains that in 2012, state-owned and private coal mines in Ukraine reported extracting up to 61.1 million tons of thermal coal. But the state railway company Ukrzaliznytsia transported 66.9 million tons during that time. The 5.8 million ton difference, he said, represents illegally extracted coal.

Coal miners’ trade unions estimate that the actual amount is closer to 6 to 7 million tons. Considering that the average price for coal is about $100 per ton, the annual output of illegally mined coal could be worth $700 million, according to a Nov. 22, 2012 statement by the Independent Trade Union of Ukraine and local union of Donbas (Eastern Ukrainian coal-mining area). “Recently, new pits and quarries are appearing like mushrooms in warm and rainy weather,” the joint statement reads.

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