Posted By Global Banking and Finance Review
Posted on January 14, 2025
(Reuters) - Ukrainian steelmaker Metinvest has suspended operations at Ukraine's only coking coal mine in the eastern part of the country, it said on Tuesday, citing a deteriorating security situation.
Reuters reported on Monday that Ukraine had stopped production at its Pokrovsk mine, which feeds the country's steel industry, because of the proximity of advancing Russian forces.
The plant in the embattled city of Pokrovsk is the only Ukrainian mine producing coking coal needed for the country's steelmaking industry, which has withered since Russia invaded in February 2022.
Russia has long been closing in on the key logistics hub of Pokrovsk. DeepState, a Ukrainian military analytical blog based on open-source intelligence, said Moscow's troops were less than 2 km (1.24 miles) from one of the mine shafts.
"As of the date of this announcement, Metinvest's operations at Pokrovsk Coal have been suspended due to the evolving frontline conditions, power supply shortages and the deteriorating security situation," a Metinvest statement said.
Ukraine produced about 3.5 million metric tons of coke in 2023, according to the national coke association, exclusively using coking coal mined in Pokrovsk.
Its steelmakers' union said last year that the mine's potential closure could cause steel production to slump to between 2 million and 3 million tons in 2025 from 7.6 million tons in 2024 because of a lack of coking coal.
Metinvest said its management team is implementing contingency plans to maintain the availability of essential raw materials for steel production.
"This includes increasing the supply of coking coal from the group’s US subsidiary for internal use, as well as utilising recently accumulated coal stocks, while arranging additional third-party sources of these materials," the company said.
The metallurgical sector is one of Ukraine's main economic drivers, alongside the agricultural and chemical sectors.
However, the loss or occupation of several large plants at the beginning of the Russian invasion has sharply reduced exports of metal products, which totalled only $4.4 billion last year, compared with agrarian exports of more than $24 billion.
(Reporting by Rishabh Jaiswal in Bengaluru, Pavel Polityuk and Yuliia Dysa; Editing by David Goodman)
