Ukraine’s largest metal producer Metinvest has suspended operations at its coal plant close to the frontline city of Pokrovsk within the Donetsk area on account of approaching Russian forces, the corporate introduced Tuesday.
The determination to shut the Pischane plant follows heavy preventing within the Pokrovsk district, a key Ukrainian logistics hub that the Russian advance has focused for months.
Ukrainian forces are beneath intense stress from Russian troops trying to breach defensive strains, Ukrainian Commander-in-Chief Oleksandr Syrskyi stated throughout a go to to the entrance line.
“Battles within the Pokrovsk sector are extraordinarily intense,” Syrskyi stated. “The enemy is deploying all accessible forces to interrupt by way of our defenses, however Ukrainian troopers are demonstrating extraordinary resilience.”
“Currently, battles proceed within the Pokrovsk district towards the enemy, who’re primarily superior in manpower. We should make unconventional choices to boost the resilience of our protection and extra successfully destroy the invaders,” he was quoted by UkrInkind as saying.
Pokrovsk is essential as it’s a terminus for Ukrainian army provides on the entrance line. If it falls to Russia, then Ukraine’s protection of your complete Donbas entrance line will change into tougher. In addition, there are few cities or defensible positions between Pokrovsk and the Dnipro River that divides Ukraine in two.
Pokrovsk is residence to a key coal mine
Pokrovsk is doubly essential as it’s also residence to the strategically essential Pischane coal mine, which provides most of Ukraine’s metallurgical sector with a particular sort of coking coal, a key a part of steelmaking.
Metinvest cited intensified shelling and the proximity of the entrance line to its Pokrovsk website, which features a mine and administrative services, as the explanations for Pischane’s closure. Core personnel and their households have been evacuated, the corporate stated, whereas it displays the safety scenario for future choices.
The Pokrovsk entrance line’s collapse has been steady and incremental for the reason that fall of Avdiivka on Feb. 17, when the Russian armed forces gained the initiative within the conflict in Ukraine, as reported by bne IntelliNews.
Pischane is Ukraine’s largest coking coal producer and one of many largest in Eastern Europe, accounting for half of Metinvest’s coal provide utilized in steelmaking.
The closure poses a extreme menace to Ukraine’s metal trade. While Ukraine has different coal deposits, the coking coal deposit at Pischane is the principle supply of this key enter to the nation’s steelmaking trade. Metal exports are the nation’s second-largest overseas forex earner after agriculture.
The shutdown may scale back Ukraine’s metal manufacturing to 2-3 million metric tons yearly, down from a projected 7.5 million tons in 2024, based on Oleksandr Kalenkov, head of Ukraine’s steelmakers’ affiliation, The Kyiv Independent reported.
“If we lose Pokrovsk, our metal output will plummet additional,” Kalenkov warned, noting that imports of coking coal would considerably elevate manufacturing prices and scale back competitiveness.
Ukraine’s metal trade has already suffered substantial losses together with the destruction of Metinvest’s Azovstal plant in Mariupol, a logo of resistance throughout the early months of Russia’s invasion.
The repercussions of shedding the mine transcend metal output, bne IntelliNews reported. Pokrovsk and close by cities corresponding to Zaporizhzhia rely closely on the metallurgy sector, with 1000’s of native residents employed by corporations like Metinvest. The city has already suffered from workforce shortages, electrical energy blackouts brought on by Russian strikes and disrupted provide chains, based on Reuters.
Producers are already in search of different sources of coking coal in Ukraine, an nameless supply from Ukraine’s metal trade instructed Reuters. However, imports will doubtless be required if the Pokrovsk mine is misplaced, driving up manufacturing prices and making Ukraine’s metal much less aggressive on world markets.
The lack of Pischane would deal one more blow to the cash-strapped authorities and lower it off from one other profitable and important income stream. It follows the blow already delivered to Ukraine’s grain commerce after Russia imposed a naval blockade that stymied Ukraine’s grain exports.
Metal exports have been rising this yr, as Russia’s Black Sea Fleet was crushed again from its Crimean bases because of Ukraine’s long-range missiles.
Ukrainian metallurgical enterprises noticed iron ore exports enhance by 96% y/y within the first 10 months of 2024, reaching 27.79 million tons. Revenue surged by 59.4% to $2.34 billion, with key export markets together with China, Poland and Slovakia.
Semi-finished metal exports additionally rose by 61.8% to 1.67 million tons, producing $827.9 million in income. Turkey, Bulgaria and Egypt have been the first consumers. Long-rolled product exports grew by 23.3% to 527,440 tons, primarily to Romania, Poland and Germany. But these incomes will dwindle quickly if Pischane is unable to offer Ukraine’s metal mills with adequate coking coal.
Domestic metal manufacturing stays beneath stress. Turkey, a key buying and selling accomplice, imported 210% extra Ukrainian metal billets this yr however continues to dominate Ukraine’s flat-rolled metal imports, which rose 8.9% to 823,380 tons.
This article was initially revealed by bne IntelliNews.
