Ukraine at the request of the IMF is going to sell coal mines and reduce subsidies

The Cabinet of Ministers of Ukraine ordered the State Property Fund to prepare documents for 38 state coal mines, which will be sold at an auction. The move is one of the austerity measures put forward by the International Monetary Fund in exchange for loans. Most mines have received support in the form of direct subsidies, which the IMF does not like.

According to First Deputy Energy Minister Yuri Zyukov, the government's austerity measures include a $ 230 million cut in coal mine subsidies and corporatization of 30 percent of operating mines. Even now, 50 percent of the mines are privately owned by Rinat Akhmetov, who privatized the most productive mines.

The public sector has increased losses 2.1 percent this year to $ 410 million. Yuriy Korolchuk, an analyst with Energy Strategies, said, “The government just wants to get rid of these mines to avoid payments. In exchange for the low price, there may be requirements for capital investment in the modernization of mines and the extraction process. "

In 2013, Ukraine produced 86 million tons of coal, making it the 4th largest producer in Europe. Zyukov noted that prices increased by 34 percent in May and that the government intends to sell all coal through the state-owned Vugillya Ukrainy, which will improve pricing policy. The entire system of sales from state mines was thoroughly corrupt. There were a number of intermediaries who took their share by generating high prices from end customers.