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OKD investment programme boosts efficiency and safety

OKD investment programme boosts efficiency and safety

PRAGUE (October 8, 2012) – OKD, the North-Moravian mining company, invested almost CZK 27 billion in its development during the five years between 2008 and 2012; that is 156 percent more than in the preceding five years, when CZK 10.5 billion was invested between 2003 and 2007. “It was clear to me during my first mine trip in 2007 that the company was historically underinvested but thanks to the support of our mother company, NWR, we were able to change that and nowadays OKD is comparable to any of the world’s leading mining companies in terms of equipment and safety,” said Klaus-Dieter Beck, the outgoing Chief Executive Officer and Chairman of the Board of OKD. His successor to both positions is his current deputy, Ján Fabián, who will assume his new roles at the end of this year.

 

In 2011, OKD sold 11.196 million tonnes of coal, generated revenues of CZK 45 billion and reported EBITDA of CZK 12.1 billion, an increase of 5 percent on 2010. Profit after tax was CZK 6.1 billion. The Company’s capital expenditure reached CZK 4.57 billion in 2011, of which CZK 2.758 billion was related to underground mine development projects and machinery, and CZK 1.046 billion was related to safety and health. In 2011 OKD had a total workforce of 17,803 people, and the Company’s average salary was CZK 36,498.

 

A significant proportion of the OKD’s investment in 2011 was invested in new roadheaders and longwall sets for its mines that feature a high level of automation and better performance. Higher load bearing capacity enables coal mining at a greater depth of cover. “Equipment acquisition is now followed by a change in the system of surface and underground logistics and modernization of all company processes in order to turn the investment into a baseline for the long-term prosperity and prospects of OKD,” stated Mr. Beck.

 

OKD’s employees work in a very demanding environment, at depths of up to 1,100 metres below ground, and therefore safety is a key priority for the Company. The main measure of safety performance, LTIFR (lost-time injury frequency rate), went down by 10 percent to 7.87 in 2011 versus 8.53 in 2010. “We introduced many new safety measures and systems, such as the introduction of monitoring miners’ movements underground and establishing a central control and communication system. Other practical examples have been the procurement of new protective helmets, new safety boots and improved protective clothing for all miners,” added Mr. Beck.

 

The introduction of a Continuous Improvement programme, which aims to encourage employees to submit innovative ideas and suggestions, is central to improving OKD’s production performance and cost control. The programme also exemplifies the co-operation between the Company and its employees. In 2011, almost 1,000 employee suggestions were submitted, more than half of which were implemented and led to total savings of CZK 300 million.

 

The modern technology now installed at OKD operations requires particular skills that have to be refreshed on regular basis. This has led to the average number of training hours per employee rising by more than 400 percent over the last four years to reached the value of 21.8 training hours in 2011. OKD needs to recruit people with the right qualifications and skills, but as there is currently a shortage of skilled people in the Czech Republic OKD supports secondary-school students in mechanical and electrical engineering. After an absence of almost 20 years, OKD helped restore the mining apprenticeship system, and in July 2012 the first apprentices were employed at our mines. 

 

In March, OKD began the necessary notification and legislative processes with the Ministry of Environment by which the Company can expand mining at the Karvina Mine so as to extend its productive life for the period 2015-2035. This would open the way to approximately 30 million tonnes of coal reserves, mainly coking coal. OKD is now preparing a comprehensive EIA documentation to assess the impact of mining activities on the environment. In our experience, this process will take approximately 18 months and production is planned to start in 2016. Negotiations with property owners in Karviná – Staré Město are ongoing. Mining will affect also people in the Orlová-Doubrava and partially in Dětmarovice and negotiations will start next year.

 

Development projects are vital to address the priority area of the region identified by stakeholders – that is concern about loss of employment. It is important for the entire region that OKD continues in its mining activities. The Company is the largest employer in the Moravian-Silesian Region and by extension provides tens of thousands of jobs in supplier and customer companies in the neighborhood. OKD directly accounts for almost 4 percent of total employment in the Region and indirectly i.e. the proportion including all products and service suppliers to OKD operations, the figure is 7.5 percent. OKD spent CZK 4.6 billion on purchasing materials and spare parts from its suppliers, most of which are located in the Region.

 

“Our reclamation activities were also subject to a significant change turning the landscape influenced by mining activities into areas that are not only nature-friendly but also of benefit to local people,” said Ján Fabián. The support for the region and communities that started in 2008 when the OKD Foundation was established is significant. The Foundation has distributed more than CZK 240 million to some 1,400 publicly beneficial projects since then.

 

 

Vladislav Sobol, OKD Spokesperson

Cell phone:     725 595 417              

E-mail: vladislav.sobol@okd.cz

 

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