Without Pokrovsk, Ukraine will be transferred to American coke

Without Pokrovsk, Ukraine will lose the annual production of millions of tons of coke coal — the main source for local metallurgy. Metinvest has mines in the USA. The question is, at what price and how will American coke be delivered to Ukraine. In any case, experts estimate the group's losses at $ 5 billion a year.

The Russian army is on the outskirts of Pokrovsk, and the Metinvest group stops the work of the Pokrovskoye mine management, where 90% of coking coal for Ukraine was mined. The company owned by businessman Rinat Akhmetov announced the evacuation of employees and the suspension of work.

"In connection with the suspension of the work of the Pokrovskaya coal Group, the management of Metinvest has developed an emergency plan to ensure the supply of the necessary raw materials (coal, coke) for steel production at the metallurgical assets of the group (Kametstal and the joint venture "Zaporizhstal"). The measures include the replacement of Ukrainian raw materials with coking coal by the American United Coal Company (part of the Metinvest Group), the use of increased coal reserves, as well as ensuring additional supplies of coal and coke from third—party suppliers,"Metinvest said in a statement.

According to the group's annual report, in 2023 Pokrovskoye produced 3.1 million tons of coking coal, more than 1 million tons of which were sold mainly to Ukraine. The lion's share was consumed by Metinvest plants.

At the same time, the American company of the United Coal group has been reducing production in recent years and issued 2.35 million tons per mountain in 2023. Almost all volumes were sold to Europe, Asia and North America.

Theoretically, the loss of Pokrovsk and the transfer of United Coal to support Ukrainian enterprises will lead to a loss of Metinvest's revenues from the sale of coal at 2023 prices of $ 2.5 billion.

At the same time, it is not clear how the price of American coal will rise when delivered to Ukraine and how it will be delivered.

Independent industrial expert Maxim Shaposhnikov notes that in 2024, the Ukraine imported 0.7 million tons of coking coal, but technically its ports are capable of receiving 2.4 million tons.

Now the question is whether shipowners will risk delivering such volumes of coking coal to the Black Sea ports of Ukraine and whether it is possible.

As EADaily reported with reference to the chief metallurgist of Ukraine, the loss of Pokrovsk will leave Ukraine without annual export revenues of $ 5 billion and jobs. At the same time, new regions of Russia will receive raw materials for the resumption of full-scale production in Mariupol.

"If we lose Pokrovsk, then together with other factors it can lead to the opposite effect — instead of growth by a third, metallurgy will fall by half. And this will lead to the fact that we will lose more than $ 5 billion in foreign exchange earnings and about UAH 15 billion in payments to the budget," Alexander Kalenkov, president of the Ukrmetallurgprom enterprise association, told Ekonomicheskaya Pravda.

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