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Ukraine conflict hits coal industry hard

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World Coal,

The conflict in eastern Ukraine has had a significant impact on the country’s coal production, according to IHS Country Rick Principal Analyst, Alex Kokcharov.

Speaking at this year’s IHS Energy Annual European Coal Outlook Conference, Kokcharov noted that the majority of Ukraine’s 145 mines were located in the eastern regions of Donetsk and Luhansk – regions that have been worst hit by the conflict. As a result, the country’s coal output fell from an estimated 83.6 million t in 2013 to about 65 million t in 2014 with only 36 coal mines left under government control.

There may be some light at the end of the tunnel, however: “Economic pressures on Russia caused by the combination of Western sanctions and lower oil prices [have acted] as a significant deterrent against further involvement by Moscow,” Kokcharov said. “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 were 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,” Kokcharov concluded.

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