Ukraine's Coking Coal Dilemma: A Steel Industry's Standoff

Ukraine's key coking coal mine, crucial for its steel industry, is operating at half capacity due to nearby Russian forces. Possible closure could drastically reduce steel output. Efforts to find alternative coal sources are essential, but imports may increase costs.

Ukraine's critical coking coal mine, integral to its steel production, is currently running at half capacity amidst the encroachment of Russian forces. As of Wednesday morning, Ukrainian industry sources confirmed the threat as Russian troops approached within 5 kilometers of the Pokrovsk mine.

Owned by steelmaker Metinvest BV, the mine still operates two out of three shafts, although its future remains uncertain. Positioned just 10 kilometers west of Pokrovsk, a strategic location, the mine now faces immediate danger with Russian troops reportedly 3 kilometers from the town's periphery.

The steel industry's prospects are at risk, with potential mine closure slashing steel production to 2-3 million metric tons next year, down from an expected 7.5 million in 2024. Alternative coal sources within Ukraine are sought, though imports seem inevitable, likely raising costs. Despite these challenges, the Ukrainian steel industry's output was up 23.1% in 2024, reaching 7 million tons.

(With inputs from agencies.)