OREANDA-NEWS. December 7, 2011. DTEK and the Ministry of Energy and Coal Industry of Ukraine signed agreements on the concession of the integral property complexes of state-owned coal mining companies Rovenkianthracite and Sverdlovanthracite for 49 years. The agreements were signed based on the outcomes of open concession tenders, which had been held in Ukraine for the first time. The management of the property of the above state coal companies will be conducted by DTEK Rovenkianthracite LLC and DTEK Sverdlovanthracite LLC.

“We are sure that the future development of Rovenkianthracite and Sverdlovanthracite will be an example of successful public-private partnership in the form of concession. The state and the coal companies will get secured sales market for their products, significant investments into the social sector, introduction of comprehensive occupational safety system and best safety standards, development of the infrastructure of cities and towns. At the same time in-house coal supplies are crucial for the development of DTEK's generation business. Our power plants consume most of the coal manufactured within the group and it is particularly important for us to have fuel resources to be able to plan construction of new power units. We have a clear vision of the development of Rovenkianthracite and Sverdlovanthracite till 2030 and have developed a UAH 6 million investment program for the next five years. Our primary objectives are to reach the total annual output of 15 tonnes of anthracite, to increase labour productivity and to introduce new equipment,” Maksim Timchenko, DTEK's CEO, said.

DTEK will take an active part in the social and economic development of Lugansk region where the enterprises under concession are located. It implies complex financing of the social sector, medical institutions and utility and economic infrastructure of the region. Signing of the relevant agreement is expected in December 2011.

“According to the concession agreement capital investments in Rovenkianthracite in 2012-2016 will amount to UAH 2 998 million. Social obligations to workers are also taken into account. The miners will receive household fuel as before. Concession terms and conditions imply one hundred percent job placement for all the employees of Rovenkianthracite at the new DTEK Rovenkianthracite enterprise,” Mr. Aleksandr Bogdanov, the General Director of Rovenkianthracite, said.

“Now Sverdlovanthracite has a reliable investor. Together we are planning to spend more than UAH 20 bln in the nearest 20 years, which will ensure implementation of large-scale projects aimed at developing operations. I am sure we will restore former glory of Sverdlovanthracite and reach annual production of 7 Mt, last recorded in 1990,” Aleksandr Koval, the General Director of Sverdlovanthracite, said.

Under the concession agreements, DTEK makes health, safety and environment commitments and undertakes social and remuneration obligations brought forward by the representatives of the enterprises’ trade unions and local authorities during the preparation for the tender. Future cooperation between DTEK and the coal companies will become a logical continuation of public private partnership, within which financial support agreements with Rovenkianthracite and Sverdlovanthracite were concluded in 2010. About UAH 900 m was granted to the enterprises in 2010-2011 to perform these obligations. It enabled Sverdlovanthracite and Rovenkianthracite to increase their coal production by 13.5 % and 48.4 % respectively for the last two years.