According to an article in The Economist, a huge coal mine near the strategic Ukrainian city of Pokrovsk could fall under Russian control, dealing another blow to Ukraine’s steel industry. Currently, Pokrovsk is one of the hottest spots on the frontline and a possible next target for Russian troops as they continue to advance in eastern Ukraine.
Russian forces are closing in on the city, only 8 kilometres from its eastern outskirts. The Ukrainian army is preparing for a fierce battle by digging new defensive lines west of Pokrovsk, hoping to hold the town or launch an organised retreat if it is captured.
However, Moscow’s main goal is not only to control an important transport hub. There is a modern coal mine near Pokrovsk, which is just a 15-minute drive from the city and is a real “pearl” of the region.
The historical importance of Donbas
Donbass became an industrial centre at the end of the 19th century, when rich coal deposits were discovered here. This coal became the basis for the development of the steel industry. After the annexation of part of Donbas in 2014, Ukraine lost about 80% of its coal resources. And in 2022, during the siege of Mariupol, the destruction of two of the largest steel plants, including Azovstal, further undermined Ukraine’s economy.
The Pokrovsk mine, owned by Rinat Akhmetov’s Metinvest, remains an important asset. The mine is the largest in Ukraine in terms of coking coal production, which is essential for ironmaking. In 2023, the company planned to produce 5.3 million tonnes of coal.
Political and economic implications
Experts suggest that for Russia, control over Akhmetov’s assets will also be an act of political revenge. Until 2014, Akhmetov was a key player in the Donbas political scene, and the Kremlin expected him to support the separatists. However, the Kremlin considered his defection to Ukraine to be a betrayal.
Even if Russian troops do not capture the mine, they could block its electricity supply and disrupt transport routes that bring coal west to Ukrainian mills. This could lead to a significant reduction in steel production, which has already been hit by the war.
Future challenges for the steel industry
If Ukraine loses control of Pokrovsk, it will have catastrophic consequences for the industry. According to Oleksandr Kalenkov, chairman of Ukrmetallurgprom, the losses could reduce steel production to 2-3 million tonnes a year, which would significantly worsen the economic situation in the country.
The industry may be forced to buy coal from abroad, which will increase the cost of Ukrainian steel and make it uncompetitive on the global market.
