Coal is one of the primary domestic sources of energy for Ukraine. Coal extraction in Ukraine grew till 1976, and then declined. In 1991-2004 the production capacities of coal extracting enterprises dropped almost 2.2 times. In recent years, production was only at 79% of capacity.
Today coal is being extracted in old mines and under hard mining and geological conditions. Almost 96% of mines have seen no reconstruction for over 20 years, and more than 50% of coal production equipment is worn out completely.
The high cost of Ukrainian coal requires that the industry be subsidized by the State budget.
Taking into account high cost of import energy carriers, efficient utilization of own raw stock, foremost coal resources, has led to re-consideration of the mine rating, which graded mines pursuant to prospectivity by several profitability categories.
To meet the growing demand of Ukrainian consumers for coal products and in the light of the required stage-by-stage transfer to the utilization of domestic resources, there are two directions for the coal industry’s development.
According to the first option, production capacities by 2030 will grow to 124.4 mn tons per year, with a use rate of 90%. Coal production volume would increase to 112.0 mn tons, which will satisfy national demand by only 76.5%. Around 30.6 mn tons of coal will be imported, including 18.3 mn tons of power-generating coal and 12.3 mn tons of coking coal.
The second option forecasts a rise in production capacities by the end of 2030 to 144.4 mn tons per year, with the same use rate, which will bring coal production to 130.0 mn tons or 88.8% of the forecast need. This will lower coal imports to 14.6 mn tons, including 2.5 mn tons of power-generating coal and 12.0 mn tons of coking coal. This option requires the timely replenishment of mine stock through raising the technical and technological level of coal mining companies and the construction of new mines with a corresponding increase of capital investments.
In the first stage of this option (2006-2010), a set of problems should be solved to develop mine stock. The first is the replenishment of the technical and technological basis and its further transfer from state to commercial ownership. To accomplish this, 17.0 mn tons of new production capacities should be launched via the completed construction of the second stages at three mines, the reconstruction of working coal mining enterprises accompanied by the acceleration of facilities improvement and increasing the use rate to 86%. Also, starting in 2006, the construction of three new mines, which began before 2001, should be re-started.
In the second stage (2011-2015), 8.8 mn tons of production capacities should be put on line through the completed construction of the three mines and the reconstruction of working coal mining enterprises accompanied by the acceleration of facilities improvement. To ensure the refurbishment of capacities for the future, the large-scale construction of seven new mines should begin in 2011, with the rate of production capacities’ utilization being brought to 90%. This will require corresponding financial support and technical refit of each mine construction complex.
Over the third stage (2015-2030), production capacities should grow to 144.4 mn tons per year, which requires the timely reconstruction of working coal mining enterprises accompanied by an acceleration of facilities improvement and the construction of new mines after 2015 at explored coal deposits with favorable mining and geological conditions.
Production indicators
Due to a series of wrecks and accidents, the volumes of raw (coking and power-generating) coals production in 2007 reduced versus the previous year – by 1.2% (some 900 ths. tons) in general for Ukraine and by 12% for the Ministry of coal industry. Significant lagging of extraction figures upon the Ministry of coal industry is related to structural changes of mine funds allocation by ownership forms, which are currently taking place in Ukraine.
Main production of power-generating coal grades is held in Lugansk, Donetsk, and Dnepropetrovsk regions. Lugansk region accounts for 43% of gross volume. Production figures of the region in 2007 dropped by 8% or 1,544 ths. tons as compared to 2006. More than 60 companies are involved in power-generating coal production in the region. Around 13% of gross volume of power-generating coal mined in the region (6% in all-Ukrainian output) fall for Krasnyi Partizan Mine, which belongs to SverdlovAnthracite state-owned enterprise. It is followed by Dolzhanskaya Capitalnaya Mine (same master company), which contributes 13% to power-generating coal production in the region (6% of gross output in Ukraine).
Donetsk region is the second producer with a 27% stake. In the period under review, power-generating coal production embraced 58 companies. Production leaders are OJSC Komsomolets Donbassa mine with 25% in the region’s output (7% in all-Ukrainian indicator).
Production share by Dnepropetrovsk region came to 23% in gross volumes of Ukraine. Production leaders among 10 regional producers were structural sub-department of OJSC PavlogradUgol under Geroyev Kosmosa mine – 16% in Dnepropetrovsk region (4% in gross national output).
Meanwhile, Lvov and Volyn region accounted for 7% each in the national output.
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