The Bulgarian Mining and Geology Chamber (BMGC) expects a decline of 30-50 per cent in the mining industry under the pressure of the global financial and economic crisis. The parameters of the crisis in the sector will be clear after the first quarter, said BMGC President Luchezar Tsotsorkov. He was speaking at a meeting of the boards for tripartite cooperation in the sectors of extraction and processing of mineral resources and in coal mining, energy resources and mining infrastructure, held here Wednesday.

Job cuts in the mining industry seem increasingly likely as the crisis aggravates. BMGC statistics sets the number of employed at 30,000 who produce 2,500 million leva's worth of output, or some one fifth of the the GDP.

The revenues of ore mining companies have been halved by the slumping metal prices on international markets (between 50 and 80 per cent last year), said BMGC. At the same time wages in the sector rose two-fold or more and the prices of energy and consumables, too, have increased.

In the mining of construction materials, the decline is 20 per cent or bigger. Companies in this sector have not been paid for work they had done - sometimes as much as 1 million leva per contract - and the State is one of the biggest debtor.

Among the measures proposed by BMGC is scrapping the concession fees payable to the State (to leave only the share owed to municipalities) and reducing the per-area free charged for mining concessions.

The President of the Bulgarian Industrial Association, Bozhidar Danev said the authorities granting concessions seem to lack sufficient administrative capacity which allows illegal mining businesses to thrive. In another problem, payments for work done under public procurement contract get delayed, increasing the indebtedness of the mining companies.

Danev urged increasing the funding available for exploration of subsoil resources.

Source: BTA