Home >> Our Work >> Projects >> Kolubara lignite mine, Serbia

Kolubara lignite mine, Serbia

People living near the Kolubara mine have suffered for many years from pollution and geological impacts. The mine operator does not provide for a timely resettlement and fair compensation.

 


The EBRD claims that the project helps reduce CO2 emissions. (See full size image.)
Read more in our briefing EBRD support for Kolubara paving the “ash way” for development of Serbia (pdf)

Quick facts

Planned investment: development of a new field in the lignite open pit mine in the Kolubara mining complex (located 60km south of Belgrade, spanning over 600 square kilometres)

Loans: European Bank for Reconstruction and Development (EBRD) - EUR 80 million; German development Bank KfW (EUR 65 million loan plus a grant of EUR 9 million).

Corruption: Several high ranking employees were under arrest in 2011. Allegations of corruption against the project promoter EPS are under official investigation.

Loan approved: The EBRD approved the loan without proper time to assess the loan's impacts on the local population and the Serbian energy sector.

The Serbian energy sector - dominated by lignite and the company EPS

The additional support for EPS by European public banks does not only strengthen its dominant position in the Serbian energy sector. It also directly contributes to the country's long-term reliance on lignite, one of the dirtiest and most climate damaging fossil fuels.

The state-owned energy provider Elektroprivreda Srbije (EPS), owner of the Kolubara mining complex (via its daughter company RB Kolubara), dominates the Serbian energy sector:

  • 69% of total electricity generation in Serbia is based on lignite (2010). 75% of the lignite production is coming from the Kolubara basin.
  • Power plants within the Kolubara/Obrenovac thermal and mining complex produce more than 50 percent of Serbian electricity.
  • The vertically integrated power company has a monopoly in lignite mining, electricity generation and distribution throughout the country.

The company becomes even more powerful through close personal connections between ruling political parties and the EPS management, allowing EPS to influence political decision on the Serbian energy sector to its own advantage. The Strategy for the development of the energy sector in Serbia until 2015 for instance clearly favours the interests of EPS and its coal business.

Future prospects for the energy sector

Lignite, mined in opencast pits, remains one of the main fuels for power generation within the long-term development plans of EPS.

According to official assessments the Kolubara basin has still 2.1 billion tonnes of lignite at disposal in its underground layers. Depending on the dynamics of exploration, Kolubara is expected to produce coal for another 50 years.


Power plants within the Kolubara complex already produce more than 50 percent of Serbian electricity.

More controversies around Kolubara

Corruption in Kolubara

In October 2011, 16 current and former members of the EPS management, including directors of the Kolubara mining complex, were arrested for embezzlement.

The case was already under investigation when the EBRD approved the Kolubara loan and Bankwatch made sure the EBRD was informed. But instead of waiting for the results of the police investigation, the EBRD chose to rush into the loan.

Resettlement of local communities

Local communities are not against coal exploration as such but they are fighting the expropriation of properties and are tired of the pollution from decades of coal development in the Kolubara complex.

Barosevac

Directly affected by the EBRD's project is the Barosevac community. The EBRD's project summary document (PSD) states:

Land acquisition and resettlement was substantially completed in 2008 in line with Serbian legal requirements.

That this isn't the case proved a Bankwatch fact-finding mission to Kolubara in summer 2011:

  • The Barosevac cemetery has not been removed - a precondition for opening the EBRD supported mining field C. None of the landowners have given their consent for the removal of graves.
  • 21 Barosevac households so far not included in the resettlement plans are located only 50 meters from the open pit mine. Despite the heavy impacts from the mining operations (for instance cracks in their homes), these households are not to be resettled and will not receive compensation.

 


Vreoci


An AlJazeera reportage on the issues surrounding resettlement near the Kolubara mines (local language only).

To further develop another mining field in Kolubara (field D), EPS tries to have 1180 households in the village of Vreoci resettled.

Villagers agreed with the Serbian government, that the village will be resettled collectively, but so far, no concrete plans have been established.

Instead, the Kolubara company offers insufficient compensation to households individually. Families are under pressure, live in unhealthy conditions and have been stigmatised in the Serbian media.

In summer 2011, authorities began to excavate bodies from the village's cemetery, ignoring objections by inhabitants and the fact that no agreement had been reached.

The EBRD points out that their loan is not connected to field D. The bank therefore does not feel responsible to ensure a fair resettlement in Vreoci.

But the director of fields C and D has stated in an interview with our campaigner that those fields are technologically and geologically interconnected and that their conceptual separation would be artificial.

 


Is there a way forward?

More detailed recommendations are in our briefing (pdf):
EBRD support for Kolubara paving the “ash way” for development of Serbia

The only proper solution to the range of problems with Kolubara would be not to finance the project at all. Instead, the EBRD could identify investments that counter the dominance of lignite in the Serbian energy sector and that help to increase the share of renewable energy in the country (currently only about 1%, excluding large hydro installations).

In case of the Kolubara investment, the least we ask of the EBRD is to make sure EPS respects the agreement with local communities, prepares a detailed plan for the collective resettlement of Vreoci and offers adequate compensation for families in Barosevac.


For more information, contact Zvezdan Kalmar, the Bankwatcher from Center for Ecology and Sustainable Development (CEKOR), Serbia, monitoring the project's development.

Share:

Latest developments


 

Blog entry | June 16, 2017

Almost all the countries in the Balkan region are planning to build new coal power plants, but there has been virtually no mention of the need for them to comply with new pollution standards.

Press release | June 14, 2017

Almost none of the new coal power plants planned in the Western Balkans will meet new, stricter EU pollution standards, according to a new analysis by CEE Bankwatch Network, released today.

Download the analysis as pdf.

Blog entry | June 1, 2017

The European Union’s and China’s joint commitment to climate action is tarnished by Chinese support for and the EU’s neglect of coal projects in the Balkans, as a new briefing shows. But it is still not too late to change course.

Blog entry | May 8, 2017

Life is a living hell for families in Vreoci, Serbia, where lignite excavators have almost reached their houses. As the mine’s financier, the European Bank for Reconstruction and Development must not allow Serbian state utility EPS to create a fait accompli that leaves locals with scraps and without home.

Blog entry | November 14, 2016

Now is the time for southeast Europe to start an inclusive and just transition away from lignite, argues new Bankwatch research.

Publications

Study | June 14, 2017

The new reference document on Best Available Techniques for Large Combustion Plants (LCP BREF) and its implications for new coal.

Briefing | June 1, 2017

Bosnia and Herzegovina, Serbia, Montenegro and Romania all plan new lignite power plants during the next few years. In contrast, most EU countries are giving up building new coal plants and seven EU states are already coal-free. Since the European Investment Bank, the European Bank for Reconstruction and Development and the World Bank have virtually halted lending for new coal power plants, most of them are due to be financed by Chinese state banks – ExIm Bank and the China Development Bank.

Briefing | November 14, 2016

Coal is the single biggest contributor to global climate change. But governments and investors planning new coal capacities have a range of flimsy arguments why coal would be the best or the only alternative. This briefing busts a number of myths surrounding coal, such as "coal is cheap", "alleviates poverty" or "coal is clean".

Study | November 14, 2016

This report reveals how and why promises for new jobs in south-east Europe’s coal sector are exaggerated. Hardly any coal operations across the region are economically viable, and as a result many coal workers, especially in the mines, are set to lose their jobs, even if the plans for countless new power plants materialise. Governments, coal workers and their wider communities need to work together towards a just transition.

Available languages:

Briefing | May 26, 2016

All the Western Balkans countries have committed to increase their share of renewable energy by 2020 to reach between 25 and 40 percent of their energy mix, as part of their obligations under the Energy Community Treaty. Yet this is far from obvious when examining their investment plans for new power generation capacity. Governments are actively planning to build 2800 MW of new coal plants with construction cost of at least EUR 4.5 billion. In contrast, these countries are only planning to build around 1166 MW of wind power plants, at an estimated cost of EUR 1.89 billion.