A new star is rising on the Ukrainian coal market: the State Enterprise Derzhvuglepostach.
In the near future, this enterprise will become a centralized point of sale for coal from all state-owned mines in the country.
For this, it will receive a hefty "tip" – the right to manage state subsidies to support the industry, which the Cabinet of Ministers plans to restore in the near future.
Until recently, it was believed that the "collector" of the case would be a representative of the presidential vertical of power, BPP MP Sergei Trigubenko . He is considered the unofficial curator of the country's last state-owned power generating company, Centrenergo.
But last week's events upended the situation: on June 1, Stanislav Tolchin, a candidate nominated by Rinat Akhmetov's longtime business partner, Yevgeny Geller , became the first deputy head of the Ministry of Energy, responsible for the coal industry.
Donetsk experimental labor colony
Last week, the Antimonopoly Committee presented a "Report on the Results of a Comprehensive Study of the Electricity and Thermal Coal Markets."
Of the 120 pages of this work, only a few sentences stand out, dedicated to the new approach to pricing. While previously the coal price was determined by energy market participants themselves, it will now be calculated using the "API2 + freight" formula.
In absolute terms, these components add up to 1,500 UAH per ton—a figure that DTEK, the largest market player, has long insisted on.
Thus, the Donetsk group's calculations were simply legitimized. Now, Rinat Akhmetov can no longer be accused of inflating the costs of his own thermal generation, which determines his electricity tariff.
In this regard, the conspirators immediately drew a simple parallel: DTEK managers managed to find common ground with the head of the Antimonopoly Committee of Ukraine, Yuriy Terentyev.
This theory has merit, if only because Terentyev is considered a member of Arseniy Yatsenyuk's team, who, during his two years in charge of the Cabinet of Ministers, has built an indecently close relationship with Akhmetov.
The Antimonopoly Committee categorically disagrees with this version. They say the aforementioned formula was developed by the National Commission for State Regulation of Energy and Public Utilities (NKREKU), and there is no alternative, "because the country lacks a competitive coal trading market."
Why isn't it? The answer is simple: the system is structured in such a way that coal from all state-owned mines has been centrally sold for years through an intermediary, the state-owned enterprise "Coal of Ukraine." Under such conditions, competitive pricing is out of the question.
Brand G
Hope for change arose exactly one year ago: on June 3, 2015, Ugol Ukrainy filed for bankruptcy in the Kyiv Commercial Court.
In the context of the 2014 coalition agreement, which envisaged the transfer of the coal market to direct relations between miners and energy companies, the market responded to this initiative unequivocally: it was as if the state-owned enterprise had decided to liquidate itself.
This is indeed true. However, the lethal injection to Ugol Ukrainy did not rid the market of the state-owned intermediary. This became clear after a newcomer, the State Coal Company (SCC), moved into the Kyiv office of this state-owned enterprise at 4 Bohdan Khmelnytsky Street.
Initially, the Ministry of Energy created this enterprise to consolidate and manage the country's liquid state-owned mines, excluding enterprises in the ATO zone.
The idea was conceived by then-First Deputy Minister of Energy Yuriy Zyukov. He was unable to complete the project: in the spring of 2015, he was dismissed, following his boss, Yuriy Prodan, who held the position under a BYuT quota.
His replacement, Volodymyr Demchyshyn, representing the interests of the BPP, initially followed his predecessors' lead, placing his protégé, Andriy Poltorak, at the helm of the Main Directorate of Management. However, this failed to move the issue forward. Why? There are two theories.
The first is technical: Poltorak, who came to the energy sector from McDonalds, was simply unable to organize the creation of separation balances for the mines.
The second is schematic: Zyukovsky's idea of concentrating coal miners under one wing did not fit into the concept of Sergei Trigubenko, a BPP deputy whom EP interlocutors in parliament call the "overseer" of the coal sector immediately after Demchyshyn's arrival at the Ministry of Energy.
It was not possible to obtain Trigubenko's opinion on the status attributed to him, but arguing with his influence on decision-making in the state coal business is probably pointless.
According to a source in the Cabinet of Ministers, Trigubenko has been appointing people to the coal industry for a long time.
Take, for example, one of the country's largest coal buyers, the state-owned coal company Ukrinterenergo. Two weeks after Demchyshyn's appointment to the Ministry of Energy (December 17, 2014), Igor Romanenko, who had served alongside Trihubenko on the board of the Nadra Ukrainy National Joint-Stock Company in the mid-2000s, took over.
Thursday of Habitat
By mid-2015, the State Coal Company remained a shell company. However, by then it had already taken over all of Uglich Ukrainy's major contracts. At the same time, the company was involved in consolidating its predecessor's accounts receivable.
The peak of this activity occurred in May-June 2015, when, within the framework of tripartite contracts No. 06-15/c, No. 06-15/c/1 and No. 06-15/c/2, the State Management Company accepted from Ugol Ukrainy the rights to claim against DTEK Trading LLC for 200 million UAH.
Everything pointed to the market operating under the old "intermediary" rules. But recently, the State Management Company (GUK) exchanged the former spacious office of Uhl Ukrainy for a modest rented space in the Kyivproekt building at 16-22 B. Khmelnytsky Street.
OLYMPUS DIGITAL CAMERA
The Creative Architectural Workshop LLC used to be located here. Ironically, Poltorak's enterprise will have to operate in the same style.
Why? Because the State Management Company will need to demonstrate remarkable creativity in solving its main problem: how to pay off its own debts, which the company has accumulated in less than a year of operation, while simultaneously moving offices and being deprived of income in favor of the new state-owned enterprise?
Individualist anarchist
Thus, the Ministry of Energy established a new state-owned enterprise, the Derzhvuglepostach (DVP) enterprise, at the beginning of 2016. It has at its disposal the aforementioned Ugol Ukrainy office at 4 Bohdan Khmelnytsky Street.
Recently, the company has begun to assume the role of buyer of state coal in the country, excluding the ATO zone, and its sale to thermal generation.
On March 31, Derzhvuhlepostach signed one of the first major coal supply contracts with Ukrinterenergo. The contract is worth UAH 100 million. Furthermore, the regulator recently included Derzhvuhlepostach in the list of companies receiving funds from energy market participants.
There are many theories on the market regarding the reasons for the creation of the DPV instead of the State Property Management Company.
The bottom line is that the State Coal Company acted as a front for Uglich Ukrainy, managing its contract base while it fended off the permanent seizure of its accounts by creditors and transferred its affairs to Derzhvuglepostach.
That's not all Folks!
The final transfer of Ugol Ukrainy's functions to a new player means that the latter can finally fade into history, taking with it 600 million hryvnias in debt to Donetsk Railways and approximately 2 billion hryvnias owed to Russian banks, led by Alfa-Bank and Sberbank.
There's more good news, too. All market participants, including Andrey Plyungin, head of Derzhvuglepostach, are currently awaiting the announcement of plans for the further development of the coal industry by the new minister, Igor Nasalyk.
He tried to answer this question twice.
The first time was at the end of April, when he was considering transferring the coal sector to the aforementioned Yuri Zyukov, who he planned to make the first deputy head of the Ministry of Energy. As EP has learned, Zyukov had even announced the first meeting at the ministry, but it didn't work out: that same day, he was "shot down" by being publicly accused in parliament of participating in business with the "LPR."
The second time was in May, when he appointed Anatoly Korzun as head of the Ministry of Energy's Department of Coal and Peat Mining. According to government sources, Korzun could eventually move from this position to the position of First Deputy Minister of Energy.
But now this is impossible: according to EP, on June 1, this vacancy was filled by the former head of the Makeyevugol State Enterprise, Stanislav Tolchin.
His candidacy was proposed at a Cabinet meeting. Formally, it was at Nasalyk's suggestion. But the underbelly of the process is more interesting. Volodymyr Groysman foisted Tolchin on Energy Minister Tolchin, who in turn was inspired to make the proposal by Yevhen Geller.
Formally, Geller is a member of the "Renaissance Party" parliamentary group, considered a parliamentary stronghold of Ihor Kolomoisky. But what's more noteworthy is that Geller is a longtime business partner of Rinat Akhmetov, whose personnel recommendations for the Ministry of Energy he relayed to Groysman.
Akhmetov's choice is truly a good one. Firstly, Stanislav Tolchin is publicly part of the inner circle of coal "generals" who had a personal conflict with representatives of the Party of Regions during Yanukovych's presidency. This means his candidacy will not provoke public reaction.
Secondly, Tolchin is a true professional. For example, during his tenure as head of the Makeyevugol State Enterprise, the company recorded nearly 500 tons of coal in its warehouses, despite their actual capacity being several times smaller.
Ultimately, it turns out that Rinat Akhmetov has now placed his own stake on Sergei Trigubenko's. This puts Derzhvuglepostach in an awkward position, as Akhmetov has long insisted on eliminating any intermediaries in coal trading operations.
True, Akhmetov is currently in no position to dictate the rules of the game. Therefore, there is hope that coal trade through the new state-owned pipeline will continue.
This will allow its managers to exploit relatively modest figures—since the beginning of the year, state-owned coal miners have sold only 700 tons of product on the market, worth UAH 1 billion. But everything is being calculated for the future.
Last week, Igor Nasalyk announced his intention to seek the restoration of state subsidies to cover mine losses—a figure with a dizzying number of zeros.
Dmitry Ryasnoy, EP
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