Expert: “The Kremlins plan is to leave Ukraine no coal” 

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2014/11/25 • War in the Donbas

Article by: Yevhen Solonyna

Kyiv – Ukraine cannot extract coal on most of its mines because of combat. The import of this resource from Russia was also suspended, officials report. Experts and some officials think that the Kremlin is intentionally cutting off Ukraine’s access to coal. In this situation experts advise to buy ‘black gold’ outside the country, where it is cheaper.

Russian companies stopped exporting energy-producing coal to Ukraine, reports Minister of Energy and Coal Industry Yury Prodan. He did not name the reasons Russia did this, but noted that these reasons have no economic grounds.

“Ukrainian companies paid for the coal in a timely manner,” Prodan emphasizes.

In Ukraine, the coal necessary to produce electricity is extracted, besides the combat zone, in Dnipropetrovsk, Lviv and Volyn oblast, as well as the part of Donbas controlled by the Ukrainian army, particularly Dobropillya, Krasnoarmiysk, Selidov and Vuhledar. According to the Ministry of Energy, the coal deposits in Donbas constitute 92% of all the deposits in Ukraine, and the ones in Lviv and Volyn – only 2,5%. At the same time, miners in Lviv oblast initiated the reopening of additional mines and increasing extraction.

At the same time Ukrainian coal is more expensive than African coal, Russian coal and coal from some EU countries. In particular, coal from the Republic of South Africa Ukraine had bought cost only 85 USD per ton before the Office of the Prosecutor opened a criminal case regarding possible abuse of power surrounding this import. To compare, Ukrainian coal costs 150 USD and more, as evidenced by the reports of bulk-buyers on the coal market.

Officials and experts have stated many times that cheaper brown coal, the extraction of which is being renewed in Cherkasy and Kirovohrad oblasts, may replace some of the Russian gas.

Meanwhile the coal reserves at Ukraine’s thermal power plans are smaller than last year, they will be enough for several weeks, and in some places, days, of work, experts emphasize. The Ministry of Energy and Coal promises to increase these reserves by January, especially on account of imported coal, in order for the reserves at all electrical plants to reach the safety mark of three million tons.

Omelchenko: the government should have predicted the coal deficit

The Ukrainian could have predicted the problem with coal supplies back in the summer, so the government could have ensured its purchase from various sources, but it neglected to do so, says Razumkov Center head of energy programs Volodymyr Omelchenko. According to him, it is more difficult to solve this problem in winter, but it is also doable.

“Importing coal from Russia is a very risky deal, obviously. Russia aims to disrupt Ukraine’s energy balance. Ukraine continues to send gas and electricity to Crimea and occupied parts of Donbas for free. The government can stop exporting these resources until they start paying the market price, or until they get coal in exchange. For a million dollars’ worth of coal – a million dollars’ worth of electricity. No coal – no electricity. This way Ukraine can get rid of its energy dependence on Russia and not support the occupied territories,” the expert concludes.

Energy expert Volodymyr Lartsev emphasizes that the ‘coal crisis’ in Ukraine was planned in Moscow, and is one of the main goals of the conflict the Kremlin maintains in Donbas.

“One of the reasons Russia supports ‘DNR’ and ‘LNR’ is its intention to make Ukraine fall to its knees in term of energy. They did not manage to do it with gas, which is why they took on coal,” the expert explains. “Most Ukrainian mines are in the pre-front zone, and they cannot work because of terrorist control or shelling. As this war cannot end fast, we have to agree with South Africa, the Balkan states which have coal, which accords to the needs of the Ukrainian thermal plants, or with Poland, whose coal accords with those needs partially.”

As to Ukrainian energy-producing coal, Volodymyr Lartsev says that about 45% of the mines are under ‘DNR’ or ‘LNR’ control. At the same time, about 70% of Ukrainian mines cannot work because of combat: even those on separatist-free territory suffer from artillery and mine shelling, the expert says. As such, in the nearest months Ukraine cannot solve the problem by simply increasing extraction at the mines that work.

Separatist leaders in Donbas claimed they are not against exchanging coal for electricity or other resources from Ukraine. The Ukrainian government emphasizes they have no intention to buy Ukrainian coal from the separatists.

Translated by: Mariya Shcherbinina
Source: Radio Liberty

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  • Paul P. Valtos

    I believe that Poland has plenty of coal so why not ask for some help.

  • George

    Taken to it’s conclusion, Ukraine and Crimea will be in the dark, to save supplies switch Crimea off now.

  • W8post

    What I already said in another comment: That’s the reason for the new “Humanitarian Aid” convoy; those 100 trucks leaving UA with all the coal they can get their hands on + the left over space filled with all the machinery the Russians can find. Cheaper to steal than make your own!

  • Rods

    I’m sure Russia is determined to provide as many economic challenges to Ukraine as possible an in response Ukraine and it’s allies need to do everything they can to make sure Ukraine has enough energy to see them through the winter. Like the allies did with the 1948-49 Berlin Airlift to defeat the blockade imposed by the USSR on the allied controlled part of Berlin, so we need to do the same again to defeat Russia and their totally unacceptable geopolitical plans for Ukraine.

    In the next 12 months they need to do everything they can so they have the facilities to handle supplies of coal, gas (including LPG), oil from anywhere in the world and also the import of electricity from neighbouring countries, so they are independent of Russia. The EU needs to do the same, so they can choose who supplies their energy and where we are beginning to see an energy glut, as a block keenly negotiate the prices. Russia and their one pony economy of energy, need the Western European energy market much more than we need them. Russia by the end of this year will have burned through about 50% of their peak currency reserves. It will be their turn to bleat next winter when they run out of money!

    At the same time Ukraine needs to dramatically improve energy efficiency, by reforming the energy market and changing full market prices to industry and consumers. The poor can be protected, particularly pensioners, by special payments and winter fuel allowances. This will stop the crippling subsidies that the government cannot afford, and help remove the massive corruption from this industrial sector. Ukraine’s energy footprint compared to the EU is about double so there is plenty of scope for efficiency savings.

    • W8post

      @Rod, you’re right, but lets start to get through the winter…(12 months is much to look ahead for, at this moment)

  • Mykola Banderachuk

    no coal from the Donbass, no electricity to crimea or donbass from Ukraine-really quite simple. putin and his gangster pals have shown themselves for the whole world to see, exactly who they are. CRIMMINALS AND MURDERERS

    • W8post

      As long as UA considers Crimea as theirs, UA can’t cut any supply; being gas, water or electricity. What UA CAN do is limiting/restricting the supply. How hard it may hurt the UA government, they should stay behind THEIR citizens.

      • Mykola Banderachuk

        good point, that is the flip side of the situation – one heck of a tough call

        • LorCanada

          By latest information Kyiv has cut off pensions in the occupied east Ukraine. The citizens are welcomed to move to where they can register under Ukraine law and obtain their pensions. Not sure how that fits in with gas/water and electricity but why subsidize the “occupied territory” to the benefit of Putin?

          • Mykola Banderachuk

            I do agree with you, no point to subsidize the occupied territory, all I wanted to point out is that this is a tough situation to be in considering there are alot of Ukrainians who are trapped in this zone.

  • Murf

    Jesus now coal? Ukraine can buy that almost any where and for significantly less than 150 per ton.
    In my state of Kentucky it only costs 56$ per short ton. In Wyoming it’s only 11$
    Transportation MIGHT double that.
    They would still be saving +50$ per ton. Why bother with Donbas? It was always more trouble than it was worth.
    Once again Russia is doing Ukraine a favor by showing them a better way to do business.