Coal is one of the main energy resources of Ukraine, which can be considered the engine of its economy. The current state of the coal industry is very critical and requires supportive measures. This article reveals the structure of the industry, talks about the export and import of Ukrainian coal, its reserves, and analyzes the main problems of mines operating in the country.
Coal as a guarantee of economic independence
Coal of Ukraine is the only energy carrier that the country is provided with in sufficient quantities. The coal industry occupies a large share in the structure of the fuel and energy complex and significantly affects the state of the country's economy as a whole. Increasing the profitability of this industry contributes to the growth of economic potential of Ukraine. And during periods of crisis in the energy market, the entire coal industry and related industries suffer.
Coal industry profitability
Coal mined in the Donetsk basin has a high cost. This is due to the large depth of bedding and a small mining capacity. High costs significantly reduce the profitability of the coal industry. To make the industry more profitable, economists recommend looking for opportunities to expand it and achieve lower costs for extracting useful deposits. The coal industry is considered profitable if the income from the sale of coal exceeds the cost of not less than 16%. Almost all the mines of Donbass do not meet this requirement and, according to some experts, should be closed.
Coal mines of Ukraine
About 150 mines operate in Ukraine, 90% of them are located in the Donbass region. On its territory there are about 100 operating mines producing energy and high-quality coking coal, 14 mines have the status of independent state enterprises, and 28 coal organizations are private property.
Lviv-Volyn basin occupies about 10 thousand km². Coal reserves in this territory are small, so only 2 of the 15 operating mines are planned to be left. The largest deposits of brown coal are located in the Ternopol and Transcarpathian regions, as well as in the Dnieper brown coal basin. In the Dnipropetrovsk region there are two coal enterprises: DTEK and Pavlogradugol, which have 10 mines at their disposal. More than 40 coal mines are located in the Lugansk region. In recent years, due to the difficult economic situation, some Ukrainian mines have been sold and leased out to individuals for long-term leases.
Coal reserves in Ukraine
According to documented data, Ukraine has 33.873 billion tons of coal reserves, which is 3.9% of the world's reserves. Of these, 15.351 billion tons accounted for anthracite and bitumen coal, the rest - lignite or brown coal. According to expert estimates and analyzes, Ukraine should have enough of these reserves for 460 years.
Most of the reserves are located in the Donetsk, Dnieper and Lviv-Volyn basins at a considerable depth. The reserves of existing mines amount to 6.1 billion tons, of which a large half is accounted for by anthracite, and the rest is coked coal.
Types of coal mined
Three types of coal are mined in Ukraine: brown, stone, and anthracite. Brown lies at a depth of 1 km and is a natural formation of dead organic residues that has arisen under the influence of load and elevated temperature. It is characterized by a relatively low combustion temperature due to the high moisture content (about 40%). Volatiles form half of its composition.
Coal is considered the first type of fossil fuel. Its use caused the industrial revolution, under the influence of which the coal industry was born. Coal contains much less moisture (about 10%), which leads to a high calorie content and a high combustion temperature. Volatile substances form 32% of its composition, so coal is highly flammable. The strata of this fossil occur at depths of about 3 km. Coal in Ukraine is mined in the mines of Donetsk and Lugansk regions.
Anthracite is the best grade of coal. It is almost entirely carbon. Anthracite is characterized by high calorific value and high electrical conductivity. But because of its composition, it is poorly flammable. This kind of coal lies at a depth of 6 km. Mostly deposits of anthracite are located on the territory of mountain ranges or in other areas that were subjected to strong movements of the earth's crust.
The cost of coal in Ukraine
Basically, the price of coal is formed taking into account such factors:
- natural - climatic conditions in the region, location of the deposit, technical characteristics of local coal, depth and thickness of the reservoir, other geological conditions;
- production - the material base of the mining enterprise, equipped with special equipment and machinery.
Thus, experts calculate the total cost and analyze the quality of fossil resources to determine how much a ton of coal costs. The price of each type of breed is significantly different. The most expensive type is anthracite. Its cost on average is from 2000 to 2500 UAH / t. Brown coal is considered the cheapest on the natural fuel market (about 1000 UAH / t).
Keep in mind that the cost of fossil resources also depends on their brand and class. Thus, it is difficult to say for sure how much a ton of coal costs. The breed price today is free and is set directly by mining companies.
Export and import of coal of Ukraine
Ukrainian industry uses coal for electricity production and as a raw material in metallurgy. As for thermal coal - anthracite, its country has in excess. So, this type of rock makes up about 70% of all coal production in Ukraine (often exported to other countries). However, there is a large shortage of coking coal.
Thus, the coal of Ukraine satisfies the domestic needs of the country by 60%. The state imports the third part of coking coal from Russia, the USA, Kazakhstan and other countries. Almost all of the extracted anthracite is consumed by energy companies in Ukraine. The country exports the excess amount of fossil rock to Bulgaria, Poland, Turkey and Iran. It is difficult to enter the European market with large volumes due to the presence of large reserves of high-quality coal in Poland and Germany. Also, the decrease in export supplies is significantly affected by the increase in the supply of American mineral resources in Europe. So, in recent years, the demand for coal in Ukraine has decreased by 20%.
Problems of the coal industry
The coal industry of Ukraine has been in a crisis for a long time. According to authorities, more than 70% of the fixed assets in this industry need updating and overhaul. Over 30 years of continuous use, they have substantially worn out and require replacement. Despite the rapid scientific and technological development, a large number of mines still use mainly manual labor.
The poor state of fixed capital is reflected in the quality of coal. When using worn equipment, the produced rocks are more gritty. Also, a poor and outdated technical base significantly affects labor productivity, increasing the cost of produced rock.
Coal mining in Ukraine requires additional funding. The main sources of investment in the country's coal industry are the state budget and own domestic funds of mining enterprises. To develop this sphere of the national economy, considerable capital is required. And in order to attract investment from the outside, you need to create attractive conditions for doing business.
In addition, the coal industry of Ukraine ranks first in terms of mortality and the level of injuries at work. Despite all the actions of the authorities, the coal industry remains the most dangerous type of national economy for the health of workers. According to statistics, an average of two miners lose their lives when producing one million coal.
An important problem of the Ukrainian coal industry is a large amount of coal mine methane emissions. The state is one of the five countries in the world in terms of these emissions (which account for 80% of existing mines). Experts are actively developing projects for its disposal, but so far they have managed to create conditions for processing only 1/10 of all emissions.
Unregulated rock mining is very detrimental to the development of the coal industry. Part of this production is 10% of the total production of steam coal.
Ways to improve the coal industry
To solve the problems described, it is necessary to carry out a whole range of measures aimed at modernization, reconstruction and optimization of coal production. Programs of this kind have already been implemented at some mines and have led to increased profitability.
Also, the state should step up its energy policy and make some adjustments to it. To achieve these goals, experts have created strategies for the development of important sectors of the economy and are working on large-scale energy saving projects.
Thus, in order for Ukraine’s coal to be competitive on the external market and fully satisfy the country's domestic needs, the state should work in two key areas: modernization of industry and strategic reforms taking into account the current conditions of economic development.
Industry outlook
Although Ukraine is currently experiencing an acute political and economic crisis, and some mines are forced to suspend work, the country's coal industry has significant prospects. Given how much coal is left in Ukraine, its production may become in the future the most important strategic sector of the country.
Taking into account the development trends of the coal industry in other countries and the capital intensity of mining its own breeds, in modern times Ukraine is more profitable to buy coal abroad. If in the near future the country will solve the most important problems in this sphere, the industry will very quickly begin to develop and will be able to bring the country's economy to a new level.