African coal became the reason for the squabble between Poroshenko and Yatsenyuk
The story of the purchase of coal in South Africa demonstrated the characteristic features of post-Maidan politics. Leading power groups began redistributing spheres of influence, since early parliamentary elections did not determine the winner. The victim was 500 thousand tons of coal, which should be supplied to Ukraine according to the signed contract by the Indo-British trader Steel Mont.
Just a year ago, a person who would have announced a coal shortage in Ukraine would have been looked at as an astronaut. The country produced 85 million raw coal per year; at the beginning of the heating season, the excess coal in the warehouses of thermal power plants amounted to 1 million tons. State-owned mines experienced problems with the sale of coal within the country, and the democratic media vied with each other to write about the “mining”, which was controlled by the omnipresent Family.
The situation changed in the summer of 2014. The war in Donbass led to Kyiv losing control over the territories where all the anthracite mines are located. Namely, anthracite is necessary for the operation of approximately half of the country's thermal power plants. In total, coal generation produces 35-40% of electricity and, for a number of technical reasons, there is nothing to replace it with. As a result, even with a drop in electricity consumption of more than 15%, without coal at thermal power plants, Ukrainians risked spending most of the winter by candlelight.
The government became concerned about the issue of coal supplies quite late. Only on August 19, the exporter of electricity, the state company Ukrinterenergo, signed a corresponding contract for the supply of 1 million tons of coal from South Africa. Parliamentary elections were held, and already on November 7, at a meeting of the Security Council, the president demanded that the GPU sort out the price and conditions for the supply of South African coal to Ukraine.
The weak points of the “South African deal” include the refusal to hold a tender, fairly high ash content and moisture content of coal, and a higher price compared to supplies from Russia.
At the same time, it will not be easy for GPU investigators who are not experienced in the intricacies of the global coal market to prove the presence of a corruption component. In general, taking into account the available information, the price of coal from South Africa ($86/t + $20-25 transportation, excluding VAT) turned out to be the lowest offered by traders with comparable quality and delivery conditions. A big plus for the buyer was the 20% advance payment for the supply of coal, since it is extremely difficult to pay $110 million in advance to the government, given the crisis in public finances. By the way, approximately the same amount is UAH 1,7 billion. – consumers owed money for electricity supplies since the beginning of the year.
However, the second side of the conflict accepted the challenge: Yatsenyuk went into open confrontation with the main “partner” in the parliamentary coalition. He traditionally blamed Russia for everything and turned to the SBU with a proposal to “immediately figure out who is behind the issues of redistribution of the coal market.” And Energy Minister Prodan, after interrogation by the Prosecutor General’s Office, generally stated that the cessation of coal supplies from South Africa jeopardizes the country’s energy security.
The bottom line is that the coal scandal clearly demonstrated the existence of deep contradictions between potential participants in the parliamentary coalition. Minister of Energy and Coal Industry Yuriy Prodan may lose his position. However, the question of the need to purchase coal mined on the territory of the self-proclaimed republics will be much more controversial.
Deputy Minister of Energy Zyukov, who announced such a possibility, has already been subject to public persecution. At the same time, organizing supplies would make it possible to cover most of the coal shortage by the end of winter, save significant funds and maintain, albeit illusory, hopes for the reintegration of the region into Ukraine.
However, taking into account the conflict between Poroshenko and Yatsenyuk, Ukraine will most likely have to buy additional coal from Kuzbass. Moreover, the supply of Russian coal to the thermal power plants of the state-owned company Centerenergo is one and a half times higher than the supply of overseas South African coal.
So sometimes it’s better for Arseny to chew rather than talk.
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