Ukraine's steel production faces a grave threat as Russian troops intensify their offensive near the Pokrovske coal mine, a key facility for coking coal production located just 10 km west of the town of Pokrovsk in Donetsk Oblast. Oleksandr Kalenkov, head of Ukraine's steelmakers' association, has warned that if the mine falls into Russian hands, the country’s steel output could plummet from potential levels of 7.5 million metric tons this year to a mere 2-3 million metric tons. This represents a staggering reduction that would have significant implications for the Ukrainian economy.
The Pokrovske coal mine is the largest coking coal producer in Ukraine and ranks among the largest in Eastern Europe. Coking coal is a crucial ingredient in the steelmaking process, which serves as Ukraine's second-largest source of revenue after agriculture. In the first eight months of 2024, Ukraine’s steel product exports were valued at nearly $2 billion, illustrating the sector's importance. The ongoing conflict in the eastern regions, particularly around Pokrovsk, has heightened concerns for the future of steel production.
The fighting in Donetsk Oblast has been fierce, with the area serving as a focal point for Russian military efforts. According to Serhii Dobriak, head of Pokrovsk's military administration, Russian forces were reported to be less than 7 kilometers from the town's outskirts as of early October. The town remains a critical logistical hub for Ukrainian military operations, making its defense crucial not just for steel production but for overall military strategy.
Kalenkov emphasized that the loss of the Pokrovske mine would have immediate and far-reaching consequences for Ukrainian steelmakers. In 2023, Ukraine produced approximately 3.5 million metric tons of coke, predominantly sourced from Pokrovske. With ongoing military action and the risk of the mine's capture, there are growing concerns about the future availability of coking coal. Anatolii Starovoit, head of the Ukrkoks coke association, voiced the uncertainty, stating, “We don't know where to get coal if Pokrovsk is seized.”
Industry insiders have noted that while Ukrainian producers might attempt to source alternative coking coal from other areas, the need for imports could significantly increase production costs. This would further impact the competitiveness of Ukrainian steel on the global market. Without access to local coal supplies, steelmakers could find themselves at a disadvantage, making it more challenging to maintain production levels.
Despite the grim outlook, there are ongoing efforts to evacuate civilians from Pokrovsk as the conflict escalates. Approximately 13,000 residents remain in the town, frozen in uncertainty as the military situation unfolds. As battles rage on the eastern front, the fate of the Pokrovske coal mine, and with it, the future of Ukraine's steel industry, hangs in the balance.
