By Valdislav Voronikov
The continuing political demonstrations and protests against the Belarusian government and President Alexander Lukashenko have reportedly gripped the country’s mining industry. The largest potash producer in Belarus, BelarusKali, was forced to reduce capacity due to an ongoing strike at the company’s production facilities, BelarusKali’s strike committee said on November 6. In October and November, the targeted production figures were reduced by nearly 15% compared to August, the committee said. In total, 60 company’s employees are currently participating in the strike, with many more opting for a work-to-rule strike.
Belarus opposition announced a nationwide general strike on October 26. The strike has affected major state-owned companies, including oil company Belarusneft, fertilizer giant Belaruskali, automakers MAZ, MZKT, and Belkommunmash, tractor manufacturer MTZ and appliance maker Atlant, the National Strike Committee of Belarus said.
The strike has also affected the country’s haul truck producer BelAz, although it is not clear how many employees are involved. The government officials, however, deny that the general strike has affected any industrial companies. “There is absolutely no damage. Production is manufactured and delivered as usual,” Petr Parkhomchik, Belarus industry minister, said, speaking during his visit to BelAz.
“They [protesters] gather in groups of 10, 15 or 20 men, take photos and post them on social networks, and claim that plants are not operating, protesting, not fulfilling its obligations. Our law is very strict — the man not executing his work uties will be subjected to certain penalties,” Parkhomchik added.
However, other officials are not so optimistic. For instance, another major fertilizer company Grodno Azot is experiencing certain difficulties due to the strike. “A group of a few dozens of men, encouraged from outside, calling itself a strike committee, is trying to kill the plant,” Igor Bobyl, general director of Grodno Azot, said, adding that the protesters had been terrorizing the plant for nearly three months.
Devaluation Cuts Profit
The Belarusian ruble’s devaluation, however, proved to be a more significant blow for the country’s mining industry than the strike. Since the beginning of protests in May, the national currency lost nearly 50% in value, putting heavy pressure on almost all companies’ financial performance.
During the first eight months of 2020, the country’s mining industry’s combined net profit decreased by a factor of 2.7 times to BYN 57.6 million ($22.5 million). The share of loss-making companies in the industry doubled — from 8.3% to 16.7%, the Belarus State Statistical Service estimated.
As of September 1, Belarus mining companies accumulated a total debt of BYN 2.971 billion ($1.1 billion). This figure jumped by 75.8% in national currency, as the Belarus ruble’s downward rally made foreign currency loans and borrowings way more expensive.
Against this backdrop, Belarusian mining companies allocated BYN 1.542 billion ($602 million) to repay loans, which is 90.7% more than in 2019. The Belarus ruble is likely to lose even more value, as the European External Action Service (EEAS), the EU’s diplomatic body, announced on November 13 it will consider new sanctions against Belarus for violence against protesters, some of whom were killed during street clashes.