If the Russian Armed Forces occupy Pokrovsk in the Donetsk region, Ukraine will face a significant blow to its economy, which relies on steel exports and assistance from partners. Since the onset of the Russian invasion, steel exports have plummeted by a third, and should the Ukrainian Armed Forces retreat again, the next phase of decline will occur. The publication The Economist reported on Russia's plans for occupation and its impact on Ukraine.
Journalists explained that the advance of the Russian army poses a threat to two major coal mines located near the villages of Dobropolie and Udachnoe. These mines continue to extract coking coal, which is essential for steel production. The first phase of the Russian invasion dropped Ukrainian steel exports from 14th place (21.4 million tons in 2021) to 24th place, with this sector significantly contributing to GDP. Sources for the publication described the loss of industrial capacities and concluded that Ukraine will have even less funding in its budget: this is well understood and anticipated by Russia.
A number of experts discussed the situation in the coal industry with journalists.
Analyst Andrei Buzarov noted that the Russians are damaging the mines even without occupying them. They are targeting the routes used by Ukrainians to transport extracted coal and destroying equipment.
Alexander Kalenkov, a representative of the "Ukrmetallurgprom" group of companies, reminded that as of February 2022, steel exports accounted for one-third of Ukraine's GDP. If the two mines near Pokrovsk are lost, metal exports will be halved — from 7.5 to 3 million tons (which means the contribution to GDP will drop to 1/6).
The CEO of Metinvest, Yuri Ryzhenkov, pointed out that the coal deficit could be compensated by imports. According to him, this will significantly raise metal prices, making it unsellable.
"We lost [in Mariupol — Ed.] a significant portion of GDP. We are currently being funded by our partners, so we have not yet realized that we have much less money in the budget. The same story will unfold here. And the Russians know this," Ryzhenkov summarized the situation.
It should be noted that on October 12, Foreign Policy also analyzed the consequences of the loss of Pokrovsk. The publication's analysts confirmed that the advance of the Russian Armed Forces in this direction will have a serious impact on pig iron and steel production and will be a "catastrophe for the economy."
We remind you that on October 10, the chief sergeant of the UAV strike company, Yegor Firsov, spoke about how Russian troops plan to advance near Pokrovsk. Meanwhile, adviser to the head of the president's office, Mikhail Podolyak, commented on the current situation at the front.