Ukraine - Coal Mining Improvement Project : environmental assessment

E-345 Ukraine Coal Mine Closure Opportunities for a More Cost Effective Process File I-14 February 2000 Clifton Associates Ltd. engineering science technology  Clifton Associates Ltd. engineering science technology 22 February 2000 File No. 1-14 The World Bank 1818H Street, N.W. Washington, DC 20433 U.S.A. Attention: Mr. Heinz Hendriks Mission Leader Dear Heinz: SUBJECT: Ukraine Coal Mining Restructuring Project Please find enclosed two copies of a report entitled "Ukraine Coal Mine Closure Opportunities for a More Cost Effective Process", dated February 2000. This report was prepared in keeping with the specified Terms of Reference for the Coal Sector Mission dated 12 January 2000. I trust this report will assist the World Bank in assessing future action with respect to the coal mine closures. I look forward to our next mnission together. In closing, I would like to thank the World Bank for the opportunity to work on this very interesting project. I would especially like to thank you for your professionalism and advice during the work term. I very much appreciated your wisdom. Yours truly, Clifton Associates Ltd. Ron G. Barsi P.Geo. RGB/RB Enclosures 101, 116 Research Drive Saskatoon, Saskatchewan Canada S7N 3R3 Tel: 306 975-0401 Fox: 306 975-1076  File 1-14 Page i Executive Summary From 24 January to 8 February 2000 the World Bank conducted a mission in the Ukraine to evaluate the status and intermediate results of the Coal Sector Adjustment Loan, similar for the Coal Pilot Project and to develop improved mine closure procedures for the forthcoming Coal Mining Restructuring Project. This World Bank project would partially finance the costs of closing 70 additional uneconomic mines. Experience gained to date, strongly demonstrates the need for improved mine closure procedures, particularly with respect to environmental considerations. Extensive delays in the completion of mine closure and the transfer of rehabilitated mine locations to the local administration have been a major cause for large cost overruns. There are insufficient funds available to meet the demands being registered by the regulatory authorities, the local administration and the public. An alternative approach that is timely, cost effective and involves the appropriate participants needs to be developed for the future project. From an environmental perspective, there are many opportunities for improving the cost effectiveness of the closure program. The main areas where improvements would be beneficial indude: * Prioritization of environmental concerns based on risk * Streamlining the closure process