Ukraine’s steel producers are scrambling for alternatives after the country’s last operating coking coal mine in Pokrovsk shut down on Jan. 13. Metinvest Group, the mine’s owner, halted operations and evacuated workers as Russian forces advanced on the Donetsk Oblast town.
The Pokrovsk mine, valued at around $1.8 billion before the war, was the last Ukrainian-controlled source of coking coal, a critical raw material for steelmaking. With its closure, domestic steel producers must now rely on costly imports, threatening Ukraine’s global competitiveness in the industry.
“To produce 7.5 million metric tons of steel in 2024, we would need to import 1.9 million tons of coal. We have doubts whether such quantities can be secured, and import costs will further strain steelmakers,” said Oleksandr Kalenkov, head of Ukraine’s steelmakers’ association.
Once a global top-10 steel producer, Ukraine has slipped below 20th place since Russia’s full-scale invasion. Annual coke production plummeted from 23.7 million tons in 2013 to just 2.7 million tons in 2023, reflecting the loss of key production sites in occupied territories.
With no immediate domestic alternative, steelmakers, including Metinvest and ArcelorMittal Kryvyi Rih, will turn to imports from Poland, Australia, and the U.S. However, the added costs—estimated at $50 per ton for Australian coking coal—will raise steel production expenses by 11%, squeezing already thin profit margins.
Before the war, the Pokrovsk mine supplied 66% of Ukraine’s steel industry with coking coal. Finding a replacement will require nearly 3 million tons of imports, but logistical and economic challenges loom large. Poland, the primary source of Ukraine’s coke imports (85% in 2024), has limited export capacity. Meanwhile, shipping coal from overseas can take over six weeks.
Despite the industry’s struggles, steel remains a cornerstone of Ukraine’s economy, contributing 5.7% of GDP in 2023. While production grew 21% last year, forecasts for 2025 suggest a sharp decline. Without Pokrovsk, steel output could drop to as little as 2-3 million tons, potentially cutting 1% off GDP.
Although global coking coal prices are currently low, Ukraine’s reliance on imports will inflate costs, impacting post-war reconstruction efforts. With domestic mining investments unlikely during wartime, Ukraine may eventually be forced to import steel itself, further increasing reconstruction expenses already estimated at nearly $500 billion.
