The conflict in eastern Ukraine, which started in May 2014, has had a significant implication for the coal industry in Ukraine, according to Alex Kokcharov, Principal Analyst at IHS.
“As the majority of Ukraine’s pre-war 145 coal mines were located in Donetsk and Luhansk regions, the start of the conflict brought significant disruption to the industry. Ukraine’s coal output fell from the estimated 83.6 million tons in 2013 to ~65.0 million tons in 2014. By September 2014 only 36 coal mines remained operational in the areas under government control (7 mines have been destroyed). The remaining ones ended up under the control of separatist militants in Donetsk and Luhansk regions, with varied levels of output depending on the specific location.
“Although the line of contact between the Ukrainian forces and separatist militants in eastern Ukraine was held constant for nearly three months, the NATO statement drew attention to an increase in ceasefire violations, primarily by the Russian-backed separatists. Most incidents have been concentrated around Donetsk, in Horlivka and east of Mariupol. However, economic pressures on Russia caused by the combination of Western sanctions and lower oil prices act as a significant deterrent against further involvement by Moscow. There have been no verified accounts of a level of build-up of Russian military forces that would be needed for an imminent major offensive. Another indicator that Russia is increasingly searching for a political solution was the statements by the spokespeople of the self-proclaimed Donetsk and Luhansk People’s Republics on 12 May, in which they expressed their willingness to be reintegrated into Ukraine if Kiev grants them wide-ranging political and economic autonomy.”