Soma Holding cut costs in Soma mine, neglecting safety

ISTANBUL (CIHAN)- Soma Holding, the firm operating the Soma coal mine in which hundreds of workers died and many are still trapped after an explosion on Tuesday, had dramatically reduced the cost of the mine’s coal from $140 to $24 per ton and now faces allegations that it neglected the health and safety of its workers.

In an interview with the Hurriyet daily in 2012, Soma Holding CEO Alp Gurkan stressed that Turkish Coal Enterprises (TKI) had been producing a ton of coal for $130-140, while Soma Holding had pledged to reduce the cost to $23.8 prior to taking over the coal mine from the TKI in 2005.

Answering a question on whether the company would profit from the dramatically reduced costs, Gurkan said: “Our company or any other private company would not have entered this sector if we weren’t going to profit from it. Our engineers and workers are not from another planet. It is just that a private sector work model with good planning has come into play.”

Gurkan also stressed that they mine 6 million tons of coal per year in Soma and almost 6,000 people are employed by Soma Holding.

After the accident in the Soma mine, it has been speculated that the company ignored certain work safety measures in order to cut costs. The holding took over the coal mine, which contains 18 million tons of coal reserves, from the TKI in 2005 in line with the “rdvans” system.

Rdvans refers to the rental of a mine in return for a percentage of its profits, and this system was first offered to subcontractors and previously illegal mines in the 1970s to prevent the continuation of unlicensed mining. The word rdvans is originally a French word (redevans) used in the feudal period to mean “extortion.” The use of the rdvans system in Turkey became widespread in the 1990s, and with a new mining law passed by the ruling Justice and Development Party (AK Party) government in 2005, the system became part of the country’s mining law.

The company, whose original name was Soma Kmur A.I., started its coal mining operations in 1984. CEO Gurkan maintained in the interview that the company had won a tender opened by the TKI in Zonguldak, adding that the total value of the company’s mines was $12 billion.

Apart from mining, the holding has also operated in the construction sector since 2010. Soma InIaat A.I. built Turkey’s second-tallest building, the 56-floor Spine Tower, in the Maslak district of Istanbul. It has also been reported that the holding has plans to construct a thermal plant in Merzifon worth TL 500 million.

Connections between the AK Party and Soma Holding have also come to light. It has been reported that Soma Holding Mine Enterprises General Manager Ramazan DoIru’s wife, Melike DoIru, was elected as an AK Party member of the Soma Municipal Council in the March 30 local polls.


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