Ukraine’s only gold-mining company faces bankruptcy

July24200820:52

Deputy Minister for industrial policy V. Severniuk came to the Zakarpatpolimetaly Co. July 23 to study the situation at the mine. He met with Zakarpattya oblast Governor Oleh Havashi the same day, ZIK reports.

Since late 2006, the company has been running up debts to the state budget and the Pension Fund. Wage arrears have ballooned too, reaching $200,000 as of Dec. 1, 2007. The mines operations have increased environmental dangers as poisonous substances from the mine waste got into subterranean waters.

The check run by the ministry has revealed gross mismanagement of the former company leadership that made it impossible to continue the company work.

The officials have reached an agreement that a potent investor is needed who will assume responsibility for the company debts and risk to invest large sums of money in the plant. The company needs modern technology and gold-enrichment equipment to enlarge gold extraction from the present 50% to 85%. Environmental safety must be restored, too.

In May the ministry took a decision to liquidate the company. Meanwhile, efforts to acquire its assets have intensified.

Comment by ZIK

The Zakarpatpolimetaly Co. was created in 1999 to extract gold at the Muzhyjivske deposit. It is Ukraine’s only gold-extracting plant. In the course of its work, the company extracted 840 kg of gold. In Dec. 2006, the company went out of business, laying off its 400 employees. Presently, the company is on the list of enterprises with two options: to undergo restructuring or be declared bankrupt.