On 2 November 2012, Resolution of the Cabinet of Ministers of Ukraine No. 987 “On Approval of List of State Property Objects to Be Privatized in 2012-2014 and Criteria for Determining their Privatization Methods”, dated 19 September 2012, (the “Resolution”) became effective.

The Resolution contains a list of 67 coal-extracting enterprises, which are to be privatized between 2012-2014. Enterprises mentioned in the Resolution are located in the Lviv, Volyn, Luhansk and Donetsk regions within Donetsk and Lviv coal basins.

The Resolution was adopted as part of implementation of the Law of Ukraine “On Peculiarities of Privatization of Coal-Extracting Enterprises”, which introduced a wide range of legal and regulatory incentives affordable to coal-extracting enterprises after their privatization.

Both the Law and the Resolution were adopted in line with bringing into existence of plan of reforming of the Ukrainian coal industry from 2010-2014. The plan was approved by Order No. 270 of the Ministry of the Coal Industry of Ukraine (currently the Ministry of the Fuel and Coal Industry of Ukraine) “On Approval and Implementation of a Plan to Reform the Coal Industry”” of 22 July 2010 and was aimed at liberalization of the Ukrainian coal industry sector through, inter alia, privatization of state-owned coal-extracting enterprises.

The above Resolution, along with the recently adopted Decree of the Cabinet of Ministers of Ukraine No. 728-p “On Approval of Schedule for Corporatization of State Coal-Extracting Enterprises to 2014”, indicates a consistent course taken by the Ukrainian Government towards reforming the Ukrainian coal industry, as well as the government’s understanding that it is high time to transfer state coal enterprises to private ownership in order to make them more efficient. Such transfer will also decrease the burden on the Ukrainian Budget to subsidize the unprofitable state coal-mining sector.