Ukraine Lifts Sanctions on Major Russian Coal Supplier

Ukraine’s Ministry of Economic Development and Trade lifted sanctions against the Russian coal supplier Yuzhtrans. The relevant order of December 28, 2017, was published in the electronic database of the ministry’s documents, Russian Tass agency reported.

Ukraine introduced sanctions against 18 Russian companies on October 30, 2017, including Yuzhtrans. The company is a major supplier of coal to Ukraine for decades. Yuzhtrans’s CEO Andrei Ivankov earlier said in a comment that the sanctions would adversely affect Ukrainian consumers, vowing to find new markets for his company.

In 2014, Russia invaded Ukraine’s Donetsk region, blocking coal production in the anthracite-rich region. This led the Ukrainian authorities to begin relying on imports to sustain parts of its industry and heating sectors which still on this type of energy.

According to Ukraine’s state fiscal service, the country increased coal imports by 1.8 times in January-October 2017 on January-October 2016, to $2.5 bln. Most of the coal imports came from Russia (55.7% to a sum of $1.2 bln).

In December, Energy and Coal Industry Minister Ihor Nasalyk said Ukraine plans to eliminate its reliance on anthracite coal in 2019 by retooling its power generating units, said Thursday.

The units will be upgraded in a government-financed program that will enable them to use thermal coal that is abundantly available in the country, he said.

“The program, which is very much needed, allows us to reduce [anthracite use] to 3 million mt in 2018 and to eliminate supplies of anthracite in 2019,” Nasalyk said at a news conference. “In 2019 we will be able to meet demand with domestically produced coal.”

The plan to eliminate anthracite use is more aggressive than has been previously announced. The energy ministry earlier planned to cut the use of anthracite to 4 million mt in 2018 from an expected 7 million mt in 2017 and 10 million mt in 2016.