Ministry of coal industry to hike price for energy coal supplied to GenCos by 10%

Minister of coal industry announced on the press-conference yesterday that his ministry initiated and is waiting for a final approval of a 10% increase in price for energy coal supplied to state GenCos. If approved, the new price will be effective starting from January 1, 2009. Yegor Samusenko: We think that the news is negative for GenCos only in the short term. After the 1Q10, the GenCos should be able to offset the coal price increase by raising their electricity prices, which, we expect, will be alleviated by the relief of political pressure after the presidential elections are over. Currently three state-owned GenCos (Centrenergo, Donbasenergo, Zakhidenergo) are buying coal only from the state coal company Vugillya Ukraini. The latter kept coal price fixed from November 2008.