The Ukrainian government has decided to liquidate its unprofitable coal mines, closing down 107 of them in 2010.
“The government funds which was use to spent on unprofitable mining enterprises support will be going to modernization of those mines, which can be successfully privatized in the near future,” a government official explained.
Last year the Cabinet of Ministers did not shut down any of unprofitable mines, on the contrary government has allocated 4 billion grivnas to cover their expenses and obliged state-run power plants to buy coal exclusively from the state-owned mines. Furthermore, in 2009, the parliament approved tax privileges for any unprofitable mining enterprises.
“It is more expedient to spend funds directed to unprofitable mines for perspective enterprises development and modernization,” a cabinet official explained to daily Kommersant-Ukraine.
According to the official, the government will concentrate on the development of 63 state-run mines in 2010. Currently, there are 126 mines and management companies under the Ministry of Coal Industry control now.