May 18, 2010 / 8:20 AM / 9 years ago

Russian mine boss resigns after Putin rebuke

MOSCOW (Reuters) - The boss of Russia’s Raspadskaya mine resigned after Prime Minister Vladimir Putin attacked him over blasts that killed 66 people.

A worker bends down during the restoration of Raspadskaya mine in Kemerovo region, May 12, 2010. REUTERS/Stringer

But shares in Raspadskaya, which accounts for around 10 percent of Russia’s coking coal output, rose as analysts said Putin was soft on its owners. By 1000 GMT the stock was up 0.8 percent, outperforming the MICEX index, which was 0.5 percent down.

Major Raspadskaya stakeholder, steelmaker Evraz, controlled by billionaire Chelsea football club owner Roman Abramovich and tycoon Alexander Abramov, rose 3.7 percent in London, also outperforming the broader index.

Putin on Monday called for tighter state control of the coal industry to improve safety and singled out mine director Igor Volkov as responsible for safety violations.

But analysts at banks and brokerages noted that Putin, known for his sharp rebukes of tycoons, avoided direct criticism of the company’s owners.

“We did not identify any direct charges against Raspadskaya’s management in media reports on the teleconference, which in our view may reduce the risks to Raspadskaya’s reputation that have arisen as a result of the fatal accident,” Renaissance Capital brokerage said in a note.

Deutsche Bank said in a research note that the outcome of the conference call chaired by Putin “eased the risks of changes in the structure of shareholders at Raspadskaya.”

Putin drastically cut the powers of the oligarchs after becoming president in 2000 ending a period of chaotic sell-offs of the 1990s under predecessor Boris Yeltsin.

But Putin’s critics say some tycoons have preserved better ties with the Kremlin and the government — as demonstrated during last year’s economic crisis when the state agreed to bail out only a dozen enterprises, including Evraz.

TENSIONS HIGH

Tensions are running high in the town where the blast took place, with riot police called in last Saturday to disperse miners who had blocked a railway line to protest over low pay and poor safety at the mine.

On Monday, Putin said Russia’s work safety body Rostekhnadzor had asked courts four times to disqualify and dismiss mine director Volkov for multiple violations.

“As we know, from the 8th to the 9th there was a devastating tragedy at the mine, but citizen Volkov is still working and sitting in the hall with you all,” Putin said.

Raspadskaya spokeswoman Galina Kovalchuk said Volkov’s resignation was accepted and that Raspadskaya’s Chief Executive Gennady Kozovoy took over his duties.

Putin also asked that Rostekhnadzor be made to report directly to the government. He said its mandate should be widened to allow it to shut down coal mines if methane content in the air exceeds 2 percent and to dismiss management without a court decision.

“All will lead to overall cost escalation in the Russian coal mining industry. Cultural and work ethic changes will take time. Safety in the short term remains an issue,” Citi analysts wrote in a research note.

Reporting by Gleb Bryanski and Anastasia Lyrchikova, Writing by Dmitry Zhdannikov; Editing by Jon Loades-Carter

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