Coal Extraction Down 6% in 2007

According to the Coal Ministry, in 2007 Ukrainian mines extracted 75.4 mln mt of coal, which is 6% less than in 2006. Coking coal production decreased by 5.8% to 28.4 mln mt, while energy coal production fell 6.1% to 47.0 mln mt.

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Company, ths mt                                        2007     2006  Chg,yoy
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Pavlohrad Coal                                         12361.1  12228.1     1.1%
Chervonoarmiyska-Zakhidna (SHCHZ:BUY) 6127.3   6750.6    -9.2%
Krasnodon Coal                                        5738.0   5708.0     0.5%
Komsomolets Donbasa (SHKD:HOLD)         3428.3   3094.5    10.8%
Other                                                     47782.3  52475.8    -8.9%
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Total                                                       75437.0  80257.0    -6.0%
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Andriy Gerus: Our view is that Komsomolets Donbasa (SHKD:HOLD) was able to post substantial growth driven by new coal seam openings over 2007, and the stock has realized most of the upside last year. Chervonoarmiyska Zakhidna (SHCHZ: BUY) must surprise the market this year: we expect a 39% rise in extraction backed on installation of new mining equipment to meet growing demand in quality coking coal. Last year Komsomolets Donbasa was busy investing into new groove which is expected to be launched by the end of this year and will provide a 70% increase in extraction capacity for the long term.