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Russian Forces Advance Towards Pokrovsk, Threatening Ukraine's Vital Coking Coal Supply
As Russian troops approach Pokrovsk, fears rise over the potential loss of a key coking coal mine critical to Ukraine's steel industry, threatening steel production and vital exports.
ND
by News Desk
2024-10-16
Russian Forces Advance Towards Pokrovsk, Threatening Ukraine's Vital Coking Coal Supply

As Russian forces continue their offensive in eastern Ukraine, they have moved within approximately 12 kilometers of the strategic supply hub of Pokrovsk, threatening not only territorial integrity but also a critical sector of Ukraine's economy. The ongoing military campaign has already displaced thousands of residents and risks severing vital road and rail links to other cities.

 

Located around 10 kilometers west of Pokrovsk lies a crucial coking coal mine, the only domestic source of coking coal needed for steel production. This mine is essential for Ukraine’s steel industry, which is second only to agriculture in generating foreign currency. Metal exports accounted for nearly $2 billion in revenue during the first eight months of 2024, emphasizing the significance of maintaining production levels.

 

Impacts on Steel Production

Oleksandr Kalenkov, head of Ukraine's steelmakers' association, has warned that if the Pokrovsk mine is lost, steel production could plummet from a projected 7.5 million metric tons by the end of the year to as low as 2-3 million tons in 2025. This stark warning underscores the economic peril posed by Russia's invasion, which has increasingly targeted Ukraine's industrial base.

 

Anatoliy Starovoit, head of the Ukrkoks coke association, highlighted that Ukraine produced approximately 3.5 million tons of coke in 2023, exclusively sourced from the Pokrovsk mine. "We don't know where to get coal if Pokrovsk is seized," he stated, pointing to the challenges of importing coal amidst military threats and logistical constraints.

 

Although Ukraine has several deep-water ports along the Black Sea, military risks make it difficult to import significant volumes of coal, as these ports are primarily designed for exports. Kalenkov noted that while some imports might be possible, they would be insufficient to meet demand, leading to higher production costs that could render Ukrainian steel less competitive on the global market.

 

Stockpiling and Alternatives

In anticipation of potential supply disruptions, some steel producers have begun stockpiling coal. ArcelorMittal Kryvyi Rih, Ukraine's largest steelmaker, reported that it has replaced some local coal shortages with imported materials while maintaining high reserves. Producers are also exploring alternative sources of coking coal from within Ukraine, although they acknowledge that imports will likely be necessary.

 

In the first eight months of 2024, Ukraine produced over 4.3 million tons of rolled steel products, with 66% exported, primarily to European Union countries. However, the looming threat to the Pokrovsk mine poses an existential risk not only to steel production but also to Ukraine's overall economic stability as the country endures the consequences of ongoing conflict.

 
Tagged:

Russia

Ukraine

MilitaryConflict

SteelIndustry

CokingCoal
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