As Russian forces make gradual progress in Ukraine’s eastern Donetsk Oblast, they are closing in on the strategic mining town of Pokrovsk, a critical hub for Ukraine’s steel industry. The potential loss of Pokrovsk, with its major coking coal mine just 9.7 km to the west, would be a significant military gain for the Kremlin and a devastating blow to Ukraine’s industrial output, reported The Kyiv Independent.

Pokrovsk’s mine, owned by billionaire Rinat Akhmetov's company Metinvest, is the biggest coking coal producer in Ukraine and one of the largest in Eastern Europe. The mine supplies essential coal for coke production, which is crucial for steelmaking – Ukraine's second-largest source of foreign currency after agriculture.

Without the mine, which supplies coking coal for steel production, Ukrainian steel output could drop from its projected 7.5mn metric tonnes this year to as low as 2-3mn tonnes.

The loss of the mine could see Ukrainian steel production halved, according to Oleksandr Kalenkov, head of Ukraine’s steelmakers' association. "If we lose Pokrovsk... we will fall to 2-3mn tonnes," Kalenkov told Reuters on October 16. 

In 2023, Ukraine produced about 3.5mn tonnes of coke using coal from Pokrovsk alone, according to Anatolii Starovoit, head of the Ukrkoks coke association. "We don't know where to get coal if Pokrovsk is seized," he said, underscoring the dependence of Ukraine’s steel sector on the mine.

The repercussions of losing the mine go beyond steel output. Pokrovsk and nearby cities such as Zaporizhzhia rely heavily on the metallurgy sector, with thousands of local residents employed by companies like Metinvest. The town has already suffered from workforce shortages, electricity blackouts caused by Russian strikes and disrupted supply chains, according to Reuters.

An unnamed source from Ukraine’s steel industry told Reuters that producers are already seeking alternative sources of coking coal within Ukraine. However, imports will likely be required if the Pokrovsk mine is lost, driving up production costs and making Ukraine’s steel less competitive on global markets.