UPDATE: Investigators open criminal case over ALROSA mine flooding

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MOSCOW/YAKUTSK, Aug 7 (PRIME) -- Russia’s Investigative Committee has opened a criminal case on safety rules violations during mining works in connection with recent flooding of uncut diamond giant ALROSA’s Mir mine, the committee’s press office said on Monday.

“A criminal case was opened on the basis of the elements of crime...violation of safety rules during mining operations,” the statement said.

The Mir mine in the republic of Yakutia was hit by flooding on August 4. Rescue operations continue on the site, 143 out of 151 miners were brought to the surface, three of them were hospitalized.

“Investigators continue to inspect the scene of the incident, 94 employees of the enterprise who worked at the mine on the day of the incident were interviewed. The forensic medical examinations of the injured were appointed. Documents related to the underground works, including duty instructions of all workers, have been seized at the mine,” the committee said.

The Security Council’s Secretary Nikolai Patrushev said that other mines in the republic should be checked as well.

ALROSA CEO Sergei Ivanov said on August 6 the company will revise parameters of its operating activity due to the incident at the Mir mine by August 19.

The company’s plan for 2017 implied production of around 39 million carats. In 2016, the Mir mine accounted for around 8.5% of the total production volume.

The shares of ALROSA lost over 1% on the Moscow Exchange on Ivanov’s statement.

Investment company Aton analysts have calculated that ALROSA is losing 1 billion rubles of EBITDA (earnings before interest, taxes, depreciation, and amortization) for each month of a Mir standstill.

Sberbank CIB experts believe ALROSA will be able to compensate lower production caused by the Mir incident with sales of commodity stocks.

(60.3281 rubles – U.S. $1)

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