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Ukrainian government accused of fraud with coal purchase in South Africa

November 11, 2014, 21:42 UTC+3 KIEV

According to the opposition, the cabinet of ministers was caught red-handed in a fraud with coal purchases from South Africa at a price thrice as high as the market prices

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© Arkhip Vereschagin/TASS

KIEV, November 11. /TASS/. Ukraine’s Opposition Bloc party led by former deputy prime minister in charges of the energy sector Yuri Boiko has accused the government of fraud in coal purchases from South Africa.

“The cabinet of ministers has been caught red-handed in a new fraud with coal purchases from South Africa at a price thrice as high as the market prices. Ukrainian heat stations will have to pay $110 per a ton of coal,” the party said in a statement made public on Tuesday. “The price is really fantastic - thrice as high as the market price and twice as high as the price for Ukrainian coal! Today, Ukrainian coal is sold in Ukraine-controlled Krasnoarmeisk at a price of $54 per ton, while Russia’s coal mined in Kuzbass is priced at $30-35 per ton. This sum plus railway tariffs to transport this coal to Ukraine will give $50 at the most. Poland’s coal is priced under $70.” Thus, the opposition party claims, Ukraine’s losses from the purchase of one million tons of such coal would amount roughly to one billion hryvnias (more than $60 million).

The Opposition Bloc said it was a real shame for Ukraine, which used to produce more than 83 million tons of coal a year, to buy it abroad.

Ukraine buys South African coal at a price of $86 per ton, taking into account transportation costs to a Ukrainian port. The final price after transportation to a heat station goes up to $110-112. As much as 80% of coal purchases are financed by Britain’s Steel Mont. Three ships loaded with coal have already reached Ukraine, another three are expected later, but the price may be changed.

On November 4, Ukraine’s National Security and Defense Council raised the issue of transparency of the coal purchase deal with South Africa. The Ukrainian prosecutor general’s office opened an embezzlement case. On Monday, Ukrinterenergo director Vladimir Zinevich and Minister of Energy Yuri Prodan were summoned for interrogation.

The Opposition Bloc demands that those involved in this fraud be called to responsibility. They also insist that the country’s losses be compensated for from salaries of those government members who had taken a decision to buy coal in South Africa.

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