December 21, 2017 / 12:11 PM / in a month

Eastern Russian port of Nakhodka chokes on coal

* Far eastern Russian port used to load wood, fish, cars

* Coal replaced other goods as Asian demand climbed

* No other major employers in town

* GRAPHIC-Russian budget taxes: tmsnrt.rs/2kurw96

By Katya Golubkova and Oksana Kobzeva

NAKHODKA, Russia, Dec 21 (Reuters) - The far eastern Russian port of Nakhodka on the Sea of Japan is swathed in coal dust. It blankets the streets, clogs the air and is blamed by some for a rise in respiratory diseases among the city’s 150,000 residents.

Yet despite pledges this year by Russia President Vladimir Putin to tackle coal pollution in ports such as Nakhodka and Murmansk thousands of kilometres away near Finland, port workers and local officials don’t expect any change soon.

Once mainly an entry point for cars from Japan and an export route for Russian wood and fish, Nakhodka has switched in recent years to shipping almost nothing but coal from the vast mines in the Siberian region of Kemerovo, also known as Kuzbass.

Now, there are few other employment options for Nakhodka’s residents and in Kuzbass the region’s 3 million people have become ever more dependent on the far eastern ports and the export revenues coal generates.

“The coal is everywhere,” said Nakhodka resident who gave his name as Ivan. “I was a sailor in the port. In winter, there was a lot of coal, the water became black, the coal was on the snow, on the ice, the ships.”

Local officials say a rise in wood export duties first prompted wharfs to switch to coal and the business has picked up since thanks to a rise both in coal prices and demand from Asia.

Shipments of coal to Asia accounted for more than half of Russia’s total coal exports last year and China’s imports of Russian coal rose 14 percent in October alone.

The thriving demand has driven major coal producers such as Kuzbassrazrezugol, Evraz and SUEK to mine more coal and export it from Nakhodka, the nearby Vostochny port and other small ports in the region.

Coal exports from the port spiked 20 percent last year from 2015. Attis Enterprise, for example, boosted its coal loadings in 2016 alone by 56 percent to 1.6 million tonnes, according to Nakhodka’s city hall data.

EASY MONEY

Sitting in his office within sight of giant mounds of coal waiting to load, Nakhodka’s first deputy city mayor Boris Gladkykh says coal now brings in 1 billion roubles ($17 million) a year, or 40 percent of the city’s budget revenues.

Gladkykh, himself a former port worker, estimates that at least one out of every 20 residents works in the port and each has two or three dependents.

“Global coal prices started to increase and with (loading) rates at a lucrative $10-15 (per tonne) you can earn big money,” he said, calculating that loading just one 100,000 tonne deadweight ship would earn $1.2 million - for two days work.

“There is only one man for moving the crane, so costs are low. Just move 10 tonnes in a bucket and you’ve earned $120 in two minutes,” Gladkykh said.

There are now seven coal wharfs in Nakhodka and five in the Vrangel Bay some 30 km away. A canning plant, a shipping maintenance depot and a wharf for fish exports have all have switched to the coal, he said.

“We load the cargo that is in demand. Wood was needed for export ... we started to load coal when demand rose,” said Alexander Tarasov, chief executive at Attis Enterprise.

Stevedores get an average monthly salary of some 50,000 roubles, according to residents, while the national average is 38,000 roubles. Coal has become so important for Nakhodka that a pedestrian area called Stevedores Alley was opened in September.

HEALTH ISSUES

But residents say scant regard is paid to the environment by some coal loading companies in Nakhodka and the dust that pervades the city is becoming too much.

Grigory, 63, who lives in the Astafyev Cape area of Nakhodka where most of the coal wharfs are, said he’s now stuck because no one wants to buy his flat.

“Dust is a big issue ... if you open windows, dust appears on the sill and we breath it in,” said Grigory, who did not want to give his last name. “This is going in our lungs, our children who are growing up, they will become ill.”

According to Nakhodka’s main hospital, which serves about three-quarters of the city’s population, the number of people suffering from asthma and pneumonia has been rising.

The number of asthma sufferers climbed to 60 in 2016 from 43 in 2014 and there were 838 pneumonia cases, up from 789 three years ago, the hospital said in email to Reuters, adding that coal dust may be one of the factors behind the increase.

Vladimir Slivyak, co-chair of the Russian environmental group Ecodefense, said the coal dust, also known as mining dust, contained dangerous substances which could cause lung problems, cancer and may even be fatal.

President Putin said in August new technologies for cargo loading based on strict ecological norms should be implemented to limit coal dust at ports such as Murmansk and Nakhodka. But he acknowledged it wouldn’t stop overnight.

“Of course, its impossible to fully abandon open-air coal loadings - we understand economics,” he said.

‘GHOST TOWN’

While Putin talks about Russia becoming a high-tech economy of self-driving cars and IT services, natural resources such as oil, gas and coal remain the largest contributors to federal budget taxes. In the first nine months of 2017, natural resources contributed 3.5 trillion roubles ($60 billion), a third of the total, according to the Russian tax service.

Initiatives to move coal out of Nakhodka, or to force operators to stop loading coal in the open air, have foundered largely because of opposition from stevedores, officials said.

Still, some companies in the area told Reuters they were investing more in measures to limit the dust, such as putting in special fences, using water to dampen the dust and other tools.

Vyacheslav Sarayev, former managing director of Nakhodka Trade Sea Port, the city’s biggest stevedore, said the firm had invested 600 million roubles on dust-busting measures over the past four years but some rivals hadn’t followed suit.

“Automatically everyone is bad, including us,” he said.

Earlier this year, Russian lawmakers proposed a ban on open-air coal loading. But stevedores argued that the law would halt most exports from far eastern ports and also hit people in the Kuzbass mining region. The legislation was dropped.

Nakhodka’s deputy mayor said the proposal would have turned the port into a ghost town.

“It would be a desert here if it had passed,” Gladkykh said. “If you close the ports, will anyone close the mines in Siberia? They should be closed too then.”

“Eighty percent of railway cargoes to the far east are coal. Let’s close it too. Let’s close everything. We will breath fresh air but walk with no trousers and eat fir cones.” ($1 = 58.6470 roubles)

Additional reporting by Denis Pinchuk, Gleb Stolyarov, Anastasia Lyrchikova, Alexei Yarkovoy and Darya Korsunskaya in Moscow, Natalia Shurmina in Yekaterinburg, Josephine Mason and Lusha Zhang in Beijing; writing by Katya Golubkova; editing by David Clarke

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