The Mineral Industry of the Czech Republic in 2008
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2008 Minerals Yearbook CZECH REPUBLIC U.S. Department of the Interior December 2010 U.S. Geological Survey THE MINERAL INDUS T RY OF T HE CZE C H REPUBLI C By Mark Brininstool The Czech Republic was an important Central European amended, establishes the rules for prospecting and exploration producer of heavy industrial goods manufactured by the of most mineral deposits. Act No. 61/1988 on Mining country’s chemical, machine building, and toolmaking Operations, Explosives and on the State Mining Administration, industries. The production of construction materials, the mining as amended, defines appropriate mining methods. The Ministry and processing of industrial minerals, and steelmaking were of the Environment enforces environmental laws in the mining of domestic and regional importance. The production of coal sector and has the authority to revoke exploration and mining for thermal powerplants and the use of nuclear power were leases if environmental laws are violated (Czech Geological important sources of electricity and helped the country maintain Survey, 2008, p. 25-26). a lower level of dependence on imported natural gas than many other Central European countries. Production Minerals in the National Economy For metals, crude steel and pig iron production each decreased by about 10% compared with production in 2007. Production of The Czech Republic’s gross domestic product (GDP) grew by industrial minerals increased significantly compared with that 2.5% in 2008, which was a significant decrease when compared of 2007 for diatomite (63%), glass sand (22%), and dolomite with the 6.1% growth recorded in 2007. Mining and quarrying (17%). Production decreased for bentonite (48%), gypsum and made up 1.5% of the total gross value added and about 1.4% of anhydrite (47%), sulfuric acid (22%), and foundry sand (17%). the total GDP (Czech Statistical Office, 2009a, b). For mineral fuels, natural gas production increased by 13% and In terms of trade, imports of crude petroleum and natural uranium mine output and concentrate production each decreased gas were the two mineral commodities that most affected the by about 10% (table 1). country’s overall trade balance, but the Czech Republic was less import dependent on these commodities than most other Structure of the Mineral Industry Central and Eastern European nations. In 2007 (the latest year for which data were available), the Czech Republic imported Table 2 is a list of major mineral industry facilities. about 7.1 million metric tons (Mt) (51.6 million barrels) of crude petroleum worth $4,227 million1 (CZK72,031 million), Commodity Review which was about 3% of the total value of imports. In the same year, the country imported an estimated 8.4 billion cubic meters Metals of natural gas worth $2,923 million (CZK49,804 million), which was about 2% of the total value of imports. About 65% Iron and Steel.—The Czech Republic had no economically of crude petroleum was imported from Russia and about 27% exploitable iron ore deposits and imported all iron ore used in was imported from Azerbaijan. Import data on natural gas primary steel production. In 2007 (the latest year for which trade supplies from specific countries were classified, but the Czech data were available), about 5.3 Mt of iron ore and concentrate Geological Survey estimated that about 75% of natural gas came was imported by the Czech Republic; about 56% of these from Russia in 2007. Exports of mineral commodities did not imports came from Ukraine and about 35% came from Russia. play a significant role in the trade balance in 2007. Coal was ArcelorMittal Ostrava a.s. and Trinecke Zelezarny a.s. were the leading export commodity in terms of value, but made up the only producers of pig iron and the leading producers of only about 0.7% of the total value of exports (Czech Geological crude steel. In 2007, these two companies combined accounted Survey, 2008, p. 196-197; Czech Statistical Office, 2009c, d, e). for about 80% of the total crude steel production in the Czech Republic (Czech Geological Survey, 2008, p. 353-357). Government Policies and Programs Reduced production of crude steel and pig iron was caused mainly by a drop in demand for steel in the fourth quarter of Three main laws are applicable to the mineral industry in the 2008 as a result of the worldwide economic crisis. World Steel Czech Republic. Act No. 44/1988 on the Protection and Use Association data show that from January through September, of Mineral Resources (the Mining Act), as amended, defines the Czech Republic averaged about 584,000 metric tons (t) of minerals that are owned by the Government, establishes the crude steel production per month, but from October through authority of certain Government agencies with respect to mining December, the average monthly production dropped to about activity, and sets out other rules on the management of mineral 377,000 t. Production was also affected by maintenance work at resources in the Czech Republic. The Czech National Council the ArcelorMittal Ostrava plant. In January 2008, ArcelorMittal Act No. 62/1988, on Geological Work (the Geological Act), as Ostrava began an overhaul of blast furnace No. 2 and completed the overhaul in early August; it then began an overhaul of blast furnace No. 3. The overhaul of blast furnace No. 3 was expected 1Where necessary, values have been converted from Czech korunas (CZK) to U.S. dollars (US$) at the rate of CZK17.04=US$1.00. CZECH REPUBLIC—2008 10.1 to take 6 months (ArcelorMittal Ostrava a.s., 2008a; World Steel Dulni pruzkum a bezpecnost a.s. was renamed Green Gas DPB, Association, 2009). a.s. following its 2007 merger with Green Gas International In November 2008, at its rolling mill at Frydek-Mistek, BV (Czech Geological Survey, 2008, p. 196; Green Gas ArcelorMittal opened a new production line for transformer International BV, 2009; Severoceske doly a.s., 2009, p. 56). plates. The company expected the new production line to Uranium.—DIAMO s.p. remained the only domestic increase the mill’s transformer plate capacity to 46,600 metric producer of uranium, and it supplied the owner of the Czech tons per year (t/yr) in 2009 and to 75,000 t/yr in 2010 from Republic’s two nuclear powerplants, CEZ a.s., with about 22,000 t/yr in 2008 (ArcelorMittal Ostrava a.s., 2008b). one-third of all the uranium it required. All domestically produced uranium was sent abroad for processing into fuel. Mineral Fuels and Related Materials All nuclear fuel for the Dukovany Nuclear Power Station was purchased from the Russian firm OAO TVEL, whereas Coal.—The Czech Republic was self sufficient in coal the Temelin Nuclear Power Station obtained its fuel from production and, in 2008, coal-fueled powerplants accounted for Westinghouse Electric Company LLC of the United States. The about 61% of all electricity generated in the Czech Republic. supplies of fuel from Westinghouse were scheduled to end in About 6.7 Mt of bituminous coal and 1.2 Mt of brown coal were 2010, after which time fuel for Temelin would be supplied by exported in 2007 (the latest year for which data were available) OAO TVEL. CEZ’s nuclear powerplants produced about 32% (Czech Geological Survey, 2008, p. 165, 175; Severoceske doly of all electricity in the Czech Republic in 2008 (CEZ Group, a.s., 2009, p. 56). 2009, p. 75; Severoceske doly a.s., 2009, p. 56). In 2008, bituminous coal miner OKD a.s. merged its CSA In January, Australian company Uran Ltd. submitted and Lazy Mines into one mine known as Karvina. The company applications for three exploration licenses in the Brzkov region planned to produce about 12.5 million metric tons per year and two exploration licenses in the Liberec region. Uran’s (Mt/yr). The Czech Coal Group reorganized its subsidiary previous applications for exploration licenses in the Brzkov Mostecka uhelna a.s., which operated the Czech Coal Group’s region had been rejected by the Ministry of the Environment. As brown coal mines in the Czech Republic. The reorganization of the end of 2008, no decision had been made about the new divided Mostecka uhelna’s mining operations between the applications by the Czech Government (Uran Ltd., 2009). newly formed companies Litvinovska uhelna a.s., which would operate the CSA Mine, and Vrsanska uhelna a.s., which would Outlook operate the Sverma and the Vrsany Mines (Czech Coal Group, 2008; OKD a.s., 2008, p. 5; 2009, p. 18). The effect of the international financial crisis, which affected According to the Czech Coal Group, production at the CSA the mineral production industry in the fourth quarter of 2008, Mine would decrease to 2.5 Mt from its current production will likely continue to reduce demand for Czech mineral level of about 5.2 Mt after 2012 if legal geographic limits to the products and cause a corresponding decrease in production mining of brown coal and lignite that had been in place since of minerals and manufactured goods. Dependence on imports 1991 were not altered. Under the current mining limitations, of natural gas and petroleum are likely to continue to affect the mine was scheduled to end production in about 2020, but the trade balance negatively but production of coal will likely the Czech Coal Group claimed that if restrictions are lifted, remain stable and provide a significant portion of fuel for the mine could operate until at least 2061. The expansion electricity generation. of the mine would require the relocation of the residents of Cernice and Horni Jirentin. At current production rates of about References Cited 7.9 Mt/yr, the Vrsany Mine was expected to be able to continue operations until 2052 (Czech Coal Group, 2008; 2009a; 2009b, ArcelorMittal Ostrava a.s., 2008a, Blast furnace no.