Heads Roll at ALROSA Following Mir Mine Incident, Profits Fall

Mining and Exploration
20/11/2017 09:23

ALROSA President Sergey Ivanov signed an order on disciplinary sanctions to the company management who committed violations of industrial safety requirements that conduced to the disaster at Mir mine on August 4, 2017, according to a statement from the company. Director and Chief Engineer of ALROSA’s Mirny Mining and Processing Division are suspended from their positions with subsequent dismissal from the company. The overall list of those responsible has been expanded to 24 people, including managers of the Mir mine, Mirny MPD, Alrosa and the Yakutniproalmaz institute. ALROSA management was instructed to determine the complete list of individuals and their personal accountability.

On November 10, industrial watchdog Rostekhnadzor announced the conclusions of the commission for technical investigation of the causes of the accident at Mir mine. The commission concluded that the accident was caused by a combination of hydrogeological, technical and organizational factors. One of the main causes of the accident mentioned by the commission was the anomalous hydrogeological complexity of the deposit conditioned by a system of unfavourably underlying cracks in the structural fault. The commission also listed a number of adopted design decisions. In particular, project organizations did not fully take into account complex geological and hydrogeological characteristics of the deposit. It decided to halt operations at the mine. The duration of the suspension of operations and conditions for resuming them were not specified. The commission identified 16 officials responsible for violations that led to the disaster. Ivanov said earlier that the company expects to resume mining at Mir in "a few years."

Mir Accident Forces Net Profit Down in Q3, 9 months

On the financial side, net income fell 51% year on year to $219.6 million (RUB 12.95 billion) for the three months ending September 30, after the miner incurred a $125.1 million (RUB 7.38 billion) “impairment cost” as a result of the incident. ALROSA net profit as calculated under International Financial Reporting Standards (IFRS) fell 47% to $1.05 billion (RUB 62 billion) in January–September, the company said in a report on Friday. Revenue for the quarter fell 14% to $999.4 million (RUB 58.93 billion). Revenue for the year thus far fell 16% to $3.62 billion (RUB 214.477 billion) and gross profit declined 31.5% to $1.83 billion (RUB 108.288 billion). Earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased 33% to $1.69 billion (99.958) billion rubles.