Ukraine sets up state coal company, closes down loss-making mines

All existing and potentially profit-making coal mines will be grouped in a state company called Ugol Ukrainy (Ukrainian Coal), while loss-making ones will be closed down, RIA Novosti was told on Tuesday evening at the Ukrainian head of state press-service.

A decree on making the coal industry more effective and developing it further was signed by Ukrainian President Leonid Kuchma.

The president gave the government three months during which to set up a national JSC Ugol Ukrainy, which will own 100 per cent of shares of enlarged and corporatised existing and potentially profit-making enterprises, mines in need of private investments, and research and development institutions to ensure the restructuring of the coal sector.

The government is to determine the effective mechanisms of company management, ways of soliciting investments, and decide how to put the company and its enterprises under state ownership.

Likewise, in accordance with the decree, shares of mines that need private investments and can be privatised with pledges of investors to solve economic, social; and ecological problems will be sold as a single package.

Within two years all loss-making enterprises will be shut down, and state-owned social infrastructure facilities of the coal enterprises will be transformed into municipal or private property.

The government was also instructed to improve the mechanisms of providing state support for the branch. At present Ukraine has 190 functioning mines.