OREANDA-NEWS. May 18, 2012. The State Property Fund of Ukraine and Crimea Titan PJSC (Autonomous Republic of Crimea) have signed an agreement to change the amount of the rent for the lease of Irshansk Mining and Processing Plant (Zhytomyr region) and Volnogorsk Mining and Metallurgical Plant (Dnipropetrovsk region). In accordance with the terms of supplementary agreements to contracts signed April 26, 2012, the rent that Crimea Titan will pay to the budget will be almost doubled. The new rental rate for the use of two mining and processing plants will exceed UAH 100 million per year.

"The agreements have been signed considering new requirements of the Cabinet of Ministers that introduced amendments to the Resolution No. 786 dd. 10.01.95 those provided increasing rental rates," - said Alexander Shitmanyuk, General Director of Crimea Titan PJSC. It appears to him that signing the additional agreement is important not only for the plant and its employees, but also for the budget.

In September 2009 between the previous government and Crimea Titan PJSC there was disagreement on the issue of rent of mining and processing plants by Crimea Titan. Crimea Titan being a part of Group DF owned by Dmitry Firtash, has demanded to prolong the lease of mining and processing plants in Irshansk and Volnogorsk. This dispute came to trial.

January 24, 2012 this lawsuit was resolved - Crimea Titan PJSC and the State Property Fund of Ukraine had signed an agreement of lawsuit for the prolongation until September 5, 2014 of the lease term for the plants, providing raw materials. Economic Court of Kyiv rendered a decision on approval of the terms of the agreements of lawsuit pursuant to which additional agreements had been signed between the lessee and the lessor.

Under the terms of supplementary agreements Crimea Titan will make contributions to the budget of almost UAH 42 million for rent of Irshansk Mining and Processing Plant and almost UAH 110 million for the rent of Volnogorsk Mining and Metallurgical Plant. In addition, the agreement provided for a new valuation of assets of mining and processing plants.

February 24, 2012 the State Property Fund of Ukraine has announced a competition for the selection of appraisers of the fixed assets of integral property complexes of state-owned enterprises "Irshansk Mining and Processing Plant" and "Volnogorsk Mining and Metallurgical Plant" in order to extend the term of the lease. During three months (from January 24 till April 24, 2012) a complete inventory of facilities, audit and independent evaluation of fixed assets and other noncurrent and intangible assets of mining and processing plants were conducted. Based on the data received the auditors and assessors calculated the rent for the use of integral property complexes of plants. The new addendum to the lease agreement was signed on April 26.

"This agreement is very important for the plant, since we are now able to work safely, not worrying about the sources of raw materials", - said Alexander Nechayev, Head of the Supervisory Board of Crimea Titan PJSC".

Reference: Crimea Titan is a leading manufacturer of titanium dioxide in Eastern Europe. Majority interest is state-owned and 50% minus 1 share is controlled by Group DF owned by Dmitry Firtash. Irshansk Mining and Processing Plant and Volnogorsk Mining and Metallurgical Plant provide raw materials for Crimea Titan.

In 2011, Crimea Titan increased the production of titanium dioxide by 2.2% compared to 2010, having reached a volume of 108,000 tons. In April, the company opened a new sulfuric acid plant, which would increase the production of titanium dioxide up to 120 thous. tons per year.

The amount of the rental rate paid by Crimea Titan for mining and processing plants is governed by Resolution issued by the Cabinet of Ministers dd. October 4, 1995, No. 786 "Concerning the Methodology of calculation of rent for government assets and the proportion of its distribution." September 14, 2011 the Resolution of the Cabinet of Ministers No. 961 "Concerning Amending Resolution of the Cabinet of Ministers of Ukraine dated August 10, 1995 No.629 and dated October 4, 1995 No.786" was issued, under this document the amount of rent was raised.