KARAGANDA, Kazakhstan - At 65, Pavel Shumkin says he has lived a decade longer than the average coal miner in Kazakhstan. He recalls a time when he drank beer with his bosses after ascending, face blackened, from the coal face.
“Now, these bosses have billions and I have my pension of
$150 a month,” he said. “They breathe a different air.”
Shumkin, an independent activist in the city of Karaganda,
fights the corner of those who earn a modest living mining the
resources that have made Kazakhstan’s $185 billion economy the
largest in Central Asia.
Their demands have become impossible to ignore for the
companies responsible for the country’s colossal Soviet-era
plants and the towns that grew up around them. One thing must be
avoided at all costs: another Zhanaozen.
At least 14 were killed during the riots that followed a
seven-month labour dispute in the oil town in December, violence
that shattered the image of stability cultivated by strongman
President Nursultan Nazarbayev, himself a former steel worker.
With authorities at pains to ensure no repeat, employers
have acquiesced to the wage demands of opportunistic workers who
have staged a number of quick fire strikes since.
“It’s a good thing this boil has been burst,” said Shumkin.
“If nothing changes, how can they answer the question: why won’t
another Zhanaozen bubble up?”
Eight of Kazakhstan’s 27 designated “monogorods”, or
single-industry towns, can be found in Karaganda province, a
vast steppe region about the same size as Iraq. Most of
Kazakhstan’s coal, copper and steel is produced here, in the
nation’s centre.
Temirtau, Iron Mountain in Kazakh, is dominated by the
smokestacks of the steel mill that employs a tenth of its
170,000 population. Nazarbayev spent a decade working in its
blast furnaces. The eldest of his three daughters was born here.
Trams filled with steel workers rattle along the main avenue
to the plant, past the bright orange logo of its owner,
ArcelorMittal , the world’s largest steel maker.
Though monthly wages averaged about $775 last year, a third
above the national average, living costs have also risen. In
May, steel workers held a rally to demand a 30 percent hike in
base salaries on top of an inflation adjustment of 7.4 percent.
“Life gets more expensive every day,” Viktor Kovyazin, 38,
said at the end of his day’s shift in the plant’s coking shop.
“The average person just doesn’t earn enough.”
The same message can be heard in the unkempt mining towns
that surround Karaganda. A group of coal miners queuing for
their bus under gathering stormclouds in Shakhtinsk were too
afraid of losing their jobs to be identified.
“Our wages are too small for the three or four mouths that
we have to feed,” one miner grumbled through gold teeth.
ArcelorMittal Temirtau paid its coal division employees an
average monthly salary of $915 last year, an increase of
slightly more than 12 percent on the previous year.
SHRINKING MARKETS
This year, the company has offered both its steel and coal
workers a 10 percent increase in base salary. It’s a compromise
that was accepted on June 19 by the coal miners’ trade union, on
the understanding that talks will resume when markets improve.
Kazakh mining giants, including Glencore-controlled
Kazzinc and London-traded Kazakhmys and ENRC,
have reaped bumper profits on record-high commodity prices. They
count some of the country’s richest men among their
shareholders.
But the spectre of labour dissent has been compounded by a
recent downturn in the market. Copper prices, for example, have
fallen by nearly a fifth in the last year as concerns mount over
Europe’s debt crisis and slowing economic growth in China.
ArcelorMittal’s Temirtau plant faced an even more sudden
shock to demand when Western financial sanctions on Iran closed
the door overnight on a market that accounted for a considerable
portion of the mill’s sales last year.
Vijay Mahadevan, chief executive of ArcelorMittal Temirtau,
said the government had advised the company to resolve its
labour issues peacefully. Talks with the steel workers’ union
are continuing.
“They way they are advising the company, they are also
advising the unions to have continuous dialogue and come to a
resolution based on negotiations rather than demonstrations,” he
said. “Starting a strike is easy. Ending it may not be.”
Kazakhmys, the world’s 11th-largest copper miner, knows this
too well. In May, around 80 miners refused to leave the Annensky
mine when their shift ended. More than 200 joined the
underground sit-in, emerging three days later with the promise
of a pay rise.
A source close to Kazakhmys, who requested anonymity, said
local activists had played on events in Zhanaozen to agitate for
a strike at the Annensky mine, even though the company had begun
a comprehensive overhaul of its wage structure months earlier.
Workers at its 1930s-built copper smelter in Balkhash had
their salaries raised by at least 35 percent this year, with one
proviso: they had to pass an exam to test whether their
knowledge matched their pay grade. Fewer than 3 percent failed.
If Kazakhmys began its salary review programme
pre-Zhanaozen, the government, on Nazarbayev’s orders, has
devoted more attention to labour since.
“Everybody needs to plug into this: trades unions, employers
and the state,” Labour Minister Gulshara Abdykalikova said. “A
worker can make demands and an employer should consider them. It
should not lead to the kind of situation we had in Zhanaozen.”
After the riots, Nazarbayev, never tolerant of dissent,
removed his son-in-law from the top job at sovereign wealth fund
Samruk-Kazyna, ultimate owner of the oilfields around Zhanaozen.
The fund has since created advisory bodies on labour issues.
A Western executive who attended one of the fund’s recent
seminars said particular attention had been devoted to mid-level
managers, who are often prone to neglect labour problems for
fear of rebuke from further up the command chain.
It’s a problem that Shumkin has witnessed in Karaganda.
“Before you know it, the whole mine is at boiling point,” he
said. “The big problem for society in Kazakhstan, and other
countries in the same situation, is to change the way managers
think before we reach breaking point.”
ALTERNATIVE INDUSTRIES
While companies are responsible for their workforce, social
problems in one-industry towns run deeper. The wounded citizens
of Zhanaozen interviewed by Reuters in December were mostly
unemployed residents of a town that had outgrown its original
purpose.
The government’s role is to support alternative industries.
In Balkhash, another of Karaganda region’s monogorods, this
means reducing dependence on the Kazakhmys copper smelter that
looms by the shore of the half-freshwater, half-saline lake.
After the last increase, the average monthly salary at the
smelter rose to about $1,000. But outside the plant, they are
lower. After spending half his $400 wage on rent, power station
worker Oleg Kudinkov, 46, says little is left to provide for a
wife and two children.
A city government programme envisages that investment in
road-building, fishing and tourism should help raise the working
proportion of the population to 60 percent by 2020 from slightly
less than half.
The miners of Karaganda region who will continue working
underground, however, are hoping the promise will not fade of
greater rewards for the dangerous work that they do.
Entering the shaft at the Kostenko mine in Karaganda, where
coal has been dug for 70 years, miners pass beneath a painting
of a wife and two children waving their breadwinner off to work.
It reads: ‘We’re waiting at home for you, alive and healthy’.
“There’s nothing romantic about working down a mine,” says
Shumkin, an accomplished guitarist, after performing a
self-penned mining ballad in the basement music studio where he
spends much of his time.
“People do it to earn money. If there’s not enough money,
and the conditions are dangerous, then what’s the point?”
