Restructuring of the coal industry is a strategic challenge for Ukraine's economy. Under the conditions support operations against terrorism, 61% of enterprises that remaining on the territories under control, the country lost anthracite mine, some companies were subjected to flooding and can not be recovered. Mines that remain reduced to the minimum volume of production, increased receivables for sold products, of wages, generally entries factors contribute to the growth of social tension.

Economic crisis of makes it impossible to finance coal industry from the state budget, there is a need to review and create new economic program of reforming area. Priority of should be self-sufficiency and suspension finance industry. Coal industry is a strategic factor of energy security and plays an important role in increasing the competitiveness of the national economy.

The further development of coal industry is impossible without updating state program that will regulate investment and innovation policy, environmental, protectionist with the aim of restructuring - access to self-sufficiency industrial enterprises and termination of state support for area. Global trends establishment of vertically integrated state-owned companies in the energy sector as a tool to reduce transaction costs is relevant for Ukraine.

Analysis of recent studies and publications

The study of on reforming coal industry in the context of the definition of strategic alternatives for its further development, those engaged in domestic and foreign scientists: A. Amosha [1, 2] L. Starichenko [1, 2] I. Yampolsky, IV Pavlenko, L. Rassuzhday A. Yanovsky, N. Kononenko, Gerasymchuk D., L. Aruzi [3] D. Black [4] A. Bryan, S. Walker [5] R. Davidson, M. Cuba, S. Foterhill, D. Heller and others. Application of vertical integration as one of the most effective forms of restructuring are the subject of research of scholars such as A. Williamson [6] V. Zakharchenko, G. Kozachenko, R. Coase [7], D. North and R. Greenberg, M. Dzhakobayds [8], John. Wallace and others.

Purpose of this paper

Aim of the paper is to determine the evaluation of strategic alternatives for restructuring the coal industry priority in the formation of vertically integrated structures in the context of sustainable economic development and reduction of public funding.

The main part

Critical state of coal industry caused by several factors, so how objective and subjective (Fig.1, Fig.2). However, this is not the whole list of factors. The main of them is in our view the absence of a systematic approach to solving the problems of the coal industry. Issues absence of an effective owner, sufficient investment to overcome the crisis, the inadequacy of price of coal production costs are key, after solving them can move on to problems such as the loss-making mines, low volume production, upgrade the technological level of enterprises, greening production, implementation of clean coal technologies and others.

Consider the structure of the coal industry, relating to Minenergouglya (Fig.3). Total number of employees is 60,000 of which 52,000 - is directly miners, the other eight thousand workers support services, repair enterprises, research & project organizations. This number of administrative staff and support workers were not properly fulfilled its function and the absence of of appropriate funding in general is inefficient, the cost of it can be attributed to non-profit - loss. Thus, the question of optimization human resources policy in coal industry: There are several ways to solve it: first, is the reduction all administrative personnel are not properly fulfilled its tasks and recruitment of the estimated need for each company; secondly, the release of only those personnel services operation which does not affect the profitability of coal enterprises. In most cases unprofitable state-owned mines with low power layers and high cost of production, to the missing mines that produce coal grade "A".

State mines produced for the first quarter in 2015 - 1650 t. of coal, 2040 tons of the plan, as we see the plan implemented by only 76%, while the indebtedness for goods shipped 998.1 mln.uaH., general receivables of 1405.0 mln UAH. The increase of receivables caused growth payables: at the end of the first quarter it is 8 967.0 mln.uaH, including 2 201.0 mln.uaH. - for electricity and 1 222.0 mln.uaH. - for salary.

As we see the increase of accounts payable does not coincide with the level of receivables, the industry is unprofitable for losses and necessary expenses of the state budget. the amount of spending increases each year (Figure 4)., in 2013 it achieved 15.3 bln.uaH., about 2014, the amount of expenditures decreased due to the loss of 55 companies and total or temporary stop operating.

Figure 1. Objective factors influencing the coal industry

coal industry vertical integration

Figure 2. Subjective factors influencing the coal industry

* Compiled by author.

Figure 3. Structure of coal enterprises that subordinated Minenergouglya at the beginning of 2015

* Compiled by the author based on [9].

The appropriations industry in the following amounts is ineffective: if consider the structure of state financing of enterprises, it appears, that cost recovery - Is 85% of the funds investments - 3%, labor - 10% payable - 1%.85% of the funds - to cover the cost, indicates the high cost of coal in 2014, it amounted to 1600 UAH. for 1 ton, the market, the price was 1,100 UAH. for 1 ton, the state pays the difference. Significant investments will not update any production facilities or technology market is not effective.

Considering the foregoing is possible to define key issues state enterprises in the coal industry:

- low competitiveness and investment attractiveness of enterprises due to the high cost of coal, a large accounts payable and high sulfur content, which reduces export potential;

- outdated mining assets that require significant funds for its renewal;

- considerable loading on the state budget through cost recovery of coal production, which is caused by imbalance of the market which makes it impossible to the break-even mining;

- long term implementing programs to close unprofitable mines due to lack of funds for the social security of the population of the regions.

The basic task of the state is to develop an integrated program of restructuring of the coal industry, the characteristic features of which should be:

- implementation of effective of marketing policy (refocusing CHP to coal);

- encouraging investments in industry to optimize of production processes and upgrading the coal mining assets;

- sale of coal to CHP of state share;

- the use of clean coal technologies (further processing of energy coal).

In our view, it is advisable to form and to consider some alternatives to the restructuring of the coal industry, which will be based on the principles of sustainable development, economic efficiency.

The essence of the first alternative is planned development of the coal industry with complete control of the state, with constant funding for the restructuring of the state budget - and for covering partially the cost of finished marketable products and conservation of mines.

Disadvantage of this is the lack of alternative of economy of public funds, a significant load on the state budget, which is important in terms conducting of counterterrorist operation, but in the absence of government subsidies have negative economic, social and environmental consequences, the elimination of which requires much more financial costs.

The advantage is a complete state control over the sector, determine the volume of mining production for fuel balance state, the pricing of products and tariffs.

Second option implies the full privatization of promising mines and their development through private investment, and the closure of unprofitable and resources exhausted mines by government funding.

Figure 4. State funding for the coal industry*

* Compiled by the author based on data [10].

The downside of this alternative is the inability to regulate the production, which is unacceptable in terms of foreign policy challenges, to enhance energy security. The absence of government regulation may cause instability in the coal industry, plant closures, dismissal of employees and environmental disasters.

This strategic alternative is attractive in terms of absence in respect of the field at the side of the state. State finances the social protection of employees, processes, mine closure and liquidation of ecological consequences of their closure.

The third alternative is available by optimization of state support restructuring of the coal industry, the growth of production through optimization of state support and the transition to self-sufficiency by 2020. At forecasting of development of the coal industry appropriate to provide the termination of state subsidies for the industry, attracting private investment to ensure energy security. Considering the economic conditions in country it is advisable to abolish public financing in the second half of 2016, enterprises of the industry will operate in market economy conditions.

Disadvantage of this alternative is cost overruns or spending in the coming year due to state budget in crisis and funding the final stage of restructuring can not be executed due to lack of funds. Consequently, for effective implementation of profitable state support need to use new approaches to optimization of state subsidy coal industry.

Restructuring of the coal industry should be performed based on the principles of optimization, conservation and liquidation of coal enterprises.

In our case, optimization is characterized by formation of an efficient organizational structure, personnel release by administrative and support staff. According to offered restructuring program 24 mine (perspective) - Industrial reserves of coal are 1.0 milliards t - to transfer to self - sustaining a profile and to transfer to the State coal company - vertically integrated structure that controls coal assets, with the exemption are subject 7424 employees.

Conservation implies complex operations relating to cessation of functioning of mines due to economic inexpediency economic activity for a long period, with the possibility of recovery upon the occurrence of favorable economic conditions. Under such conditions it is advisable to transfer 5 mines in conservation because they require significant amounts of capital investment and have a low potential forecasted production.

The elimination process implies output available resource mines and their closure provided further loss of business.6 state mines where there are no explored in commercial reserves of coal and end the existing reserves of coal and capital-intensive process of production is subject to the physical elimination of the current year (Fig.5) while the exemption covered 6008 employees.

Formation of a vertically integrated company need for centralized decisions on energy policy in the coal industry, regulation of coal production correlated with the energy balance state, implementation of environmental programs areas fulfill international requirements according to Kyoto Protocol, to ensure social security redundant employee and implementation strategic innovation development programs taking into account the structure of territorial complexes.

Figure 5. Optimization of restructuring process of coal industry*

Thus, the implementation of the program optimize the process of restructuring the coal industry should ensure that tasks such as, firstly, the formation of investment-attractive, competitive, profitable state coal company, which since 2020 will be able to carry out economic activities without state subsidies; secondly, the effective implementation of programs of social support of employees of coal enterprises that subject to conservation and elimination; thirdly, reducing administrative staff in coal enterprises, ancillary enterprises and other noncore institutions in the optimization of their work; fourth, reduce the cost of coal production and increase production volumes; fifthly, to increase in the next five years funding for programs social support of employees, the environment, health and restructuring of the coal industry; sixth, to optimize government support industry and of specialized enterprises activities; seventh, ensuring the stability of coal production that is necessary to maintain a sufficient level of energy security and of state power, high-quality products.

Management of assets of the coal industry in the structure of vertically integrated companies will promote the formation of sustainable socio-economic base of structural changes in the industryoperating activity, restoration of vertical and horizontal technological links between enterprises and strengthen the scientific and methodological support of organizational change.

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