According to Vello Tohver, the financial director of Estonian Oil Shale, Eesti Energia, the state energy company, has been reducing the amount of oil shale orders since last October. At the end of 1997, Eesti Energia purchased 25 percent more oil shale than it has ordered for next month. Estonian Oil Shale suspects the electricity producer of breaching the contract signed last year with Russian oil shale extractors.
"In October, the miners will have a four-day working week," Tohver said. "We have yet to decide which mine will be closed, either in Ahtme, Sompa, Tammiku or Kohtla, but 500 people will unfortunately become unemployed for an unspecified period."
"The general world-wide trend indicates extensive closure of mines," Tohver added. "The investments at present are few and the company's financial position is quite weak." The problem, Tohver says, is that Eesti Enrgia is relying more on Russian shale than Estonian.
"The agreement concluded last year specifies that the oil shale, which Eesti Energia imports from Russia, cannot exceed the amount established in the barter deal," Tohver said. "The barter deal says that Eesti Energia can import as much oil shale as is required for producing the electricity exported to Russia. Or in other words, Russia supplies Estonia with the resources and pays for the electricity with money. We suspect that the Russians are covering all the costs with oil shale.
"But we will not press any official charges against Estonian Energy, because we don't have a specific supply contract with them. We can accuse them only of violating the agreement they have with their Russian clients," Tohver added.
All the mines that could face closure are in northeastern Estonia, where the main oil shale deposits lie. This area also has the highest unemployment rate in the country already, and average salaries are well below the national average. A miner's average salary during the summer months is about 3,000 kroons ($214) per month, Tohver said. Estonia's average is 4,255 kroons per month.
Eesti Energia Development Director Ilmar Jogi said the Russian oil shale has been used only for the purposes specified in the barter deal.
"Eesti Energia is not using Russia's resources to generate electricity for the domestic market," Jogi assured. "Besides, the oil shale that the Russians provide us with is more expensive than that produced here in Estonia," he added. The future doesn't look bright for shale mining, Tohver said. He expressed doubt that the new underwater electricity cable that will connect Estonia and Finland by 2000 will cause an increase in shale demand.
"In my opinion the Finns are not interested in the so-called black energy that Estonian Energy produces from our oil shale," he said.
The Estonian Oil Shale company is awaiting privatization, but the Estonian Privatization Agency has not decided on a primary investor yet.