While Bulgaria was trying to keep its energy system in order and overcome the negative impact of the halted Russian natural gas supplies, the saga of the 250 miners working at the Minyor coal mine, west of Sofia, appeared to be about to end. Unfortunately for the miners the end was not a happy one. 

For more than three months the management of the mine had warned that its biggest and, in fact, only customer, the Bobov Dol thermal power plant, was decreasingly willing to buy its coal. This meant one thing: liquidation.

The mine's situation worsened dramatically when Bobov Dol decided to quota their demand and subsequently refuse the purchase of coal altogether, having said that they had a surplus of coal of their own in October 2008. Thereafter coal shipments from Pernik Minyor to Bobov Dol shrank from 4000 to 5000 tons a month to less than 100 tons and then, nothing.

Just after Christmas, the drama peaked as several dozens miners declared a hunger strike demanding that their salaries be paid. The strike was soon over, but few days later it was announced that all Minyor miners had been sent on 30 days' unpaid leave as of January 5.

Moreover, the Pernik-based quarry company was to go into administration and ultimately close, as there has been a severe decline in demand, according to company manager, Ventsislav Aleksov, as reported by Bulgarian news agency BTA. 

It was a sad end to a coal mine that claims to have had accumulated well more than two million tons of first grade coal reserves, which have an operating life-span of 15 years.

Unlike most other recent cases of companies closing down because of the financial crisis, as was the case with Maritzatex, a Plovdiv-based manufacturer of fabrics from cotton yarn, which said that it would idle all of its production capacities and lay off all of its 180 staff, the Minyor case is a result of the simple principle of supply and demand. 

Similar to the way in which Bulgaria has suffered the bitter consequences of its complete dependence on Russian natural gas, Minyor was completely dependent on orders from Bobov Dol.

The end for Minyor seems to have been a foregone conclusion ever since the Bobov Dol thermal power plant was bought by energy tycoon Hristo Kovachki.

The news about the lay-off of the Minyor miners coincided with the news that Kovachki had finally paid the 100 million leva price to the State Privatisation Agency and was officially inaugurated as Bobov Dol's owner. Kovachki's Consortium Energia MK PLC Sofia had a January 2009 deadline to pay the 100 million leva price for the thermal plant and on January 6 the transaction was completed.

The buyer has agreed to ensure that Bobov Dol only operates with Bulgarian produced coal, at a minimum annual quantity of 1 750 000 tons until December 1 2011.

This would have been great for Minyor if it were not for the fact that the privatisation agreement did not say from which coal mines Bobov Dol is supposed to buy.

Kovachki already controls six coal mines: Beli Breg, Choukourovo, Stanyantsi, Oranovo, Otkrit Vagledobiv and Balkan MK, and simple logic suggests that Kovachki would prefer to use coal from the mines he has in his portfolio rather than buying coal from other mines such as Minyor.

Further, Bobov Dol already had said they had more than enough coal supplies of their own to function, which did not help improve Minyor's situation.

The experience of another coal mining unit should have also served as an example to Minyor of what was going to happen. In mid-October 2008, two months after Kovachki signed the privatisation contract for Bobov Dol,  the Vaglishta Pernik coal mining company  said that Bobov Dol had stopped buying coal from them.  This led to the lay-off of 40 out of Vaglishta Pernik's 130 employees. At the time, the company's management said that should the situation not improve, it would lay off a further 70 people, which would in effect mean a halt to large-scale production.

It was a signal for the scheme that Kovachki was preparing to introduce by closing the circle between his thermal power plant and the six mines he already controlled. Now the Minyor case has showed that this scheme has been put into practice, the side effect being: the liquidation of an entire coal mine and the loss of jobs of hundreds of miners.