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Foreign investors to put US $6.5 billion into Ukrainian mines

November 18, 2009

In 2010, foreign banks are prepared to invest US $6.5 billion into Ukraine’s coal industry.

Natalia Korolevska, Chair of the Verkhovna Rada Committee for industrial and regulatory policy and entrepreneurship, announced this at a press conference on November 16.

According to Ms. Korolevska, the Government will be making a major push to attract outside investment to this branch next year.

Ms. Korolevska noted that the draft 2010 Budget that the Government submitted to the Verkhovna Rada for review earmarks UAH 6.5bn for modernizing the coal industry.

“We met with some foreign investors today,” said the Committee Chair, “ and we are supposed to confirm that a number of foreign banks are prepared to lend US $6.5bn to the coal industry under state guarantees.”

In addition, a project to open a state leasing company was prepared for November 16. This should help set up a center for handling investments, especially for delivering mining equipment to Ukrainian enterprises.

“In this way, we will be able to undertake a complete reorganization of this industrial branch and renew it in 2010,” said Ms. Korolevska. She added that she thought it was also necessary to reorganize the state sector of the coal industry.

“We have to break up the state-owned part of the coal sector into two parts: those companies that can be vertically integrated, starting from coal extraction to power generation, and combine this entire cycle; and those companies that will form a state concern that can optimize both failing companies and profitable ones through investment,” said the Committee Chair.

Ms. Korolevska also noted that this program has already been registered and the Government is prepared to adopt it immediately.

Moreover, in the next two weeks, a new bill will be submitted to the legislature that will present the second phase of the anti-crisis program for the mining and metallurgy sector.

“We believe that this is the step that will allow us to completely modernize production,” said Ms. Korolevska. “Today, we are not competitive. Our main assets in the industry are more than 60% depreciated. Modernization was, unfortunately, never completed, and, in some instances, never started in more than two-thirds of the industry’s enterprises. So, of course, we should be talking about serious reforms today,” concluded the Deputy.

Ms. Korolevska added that the chemicals industry also needs to be pushed to modernize.

Tags: investment, mining industry