Pokrovsk Coke Plant - Economic Impact and Tactical Considerations
The recent halt of operations at the Pokrovsk coking coal mine in Donetsk Oblast marks a critical juncture for Ukraine’s metallurgical industry and economy. As the sole domestic source of coking coal, which is essential for steel production, the Pokrovsk mine supplied 90% of the country’s needs. Its closure due to the advancing Russian military forces poses immediate and long-term challenges for Ukraine’s steel sector, exports, and economic stability.
The Importance of Pokrovsk to Ukraine’s Economy
Coking coal from Pokrovsk enabled the production of 3.5 million tons of coke in 2023, supporting steel output of 7.6 million tons in 2024. Steel remains Ukraine’s second-largest export after agriculture, accounting for $4.4 billion in revenues in 2024. EU countries received 72% of Ukraine’s steel exports, underscoring its strategic importance as a trade commodity. The loss of Pokrovsk jeopardizes these exports and reduces Ukraine’s ability to generate hard currency, essential for sustaining military operations and social programs amid the ongoing war.
The potential drop in steel production is alarming. Industry forecasts suggest that output could fall to 2-3 million tons in 2025, compared to the 10 million tons projected before the mine’s closure. This represents a 50% reduction and a severe contraction of an industry already reeling from the destruction of major steelworks in Mariupol and ongoing logistical challenges caused by the war.
Economic Impacts
The closure of the Pokrovsk mine introduces significant cost and supply chain issues. Ukraine will be forced to import coking coal, which is 30% more expensive than domestic production. In 2024, the country imported over 400,000 tons of coke, primarily from Poland, but scaling this up to replace Pokrovsk’s output will strain logistical networks. Ports designed for exports rather than imports and the military risks to shipping routes exacerbate the challenge. Import dependency will also raise production costs, making Ukrainian steel less competitive in international markets.
The implications extend beyond economics. Russia’s advance towards Pokrovsk highlights a deliberate strategy of targeting Ukraine’s economic lifelines. By disrupting steel production, Moscow not only weakens Ukraine’s fiscal capacity but also limits its ability to maintain wartime resilience. A reduced steel industry threatens to cut budget revenues by up to UAH15 billion (~$360 million), further straining public finances.
Long-Term Considerations
The Pokrovsk mine’s closure underscores Ukraine’s reliance on single points of production for key industries. This concentration of risk leaves sectors vulnerable to military and economic disruption. Diversifying raw material sources, both domestically and internationally, must become a priority in Ukraine’s post-war reconstruction strategy.
Moreover, the loss of Pokrovsk highlights the broader economic cost of the war. Ukraine’s steel output dropped from 21 million tons in 2021 to 6.3 million tons in 2022, reflecting the destruction of infrastructure and production capacity. Rebuilding the steel sector will require substantial investment, innovative supply chain solutions, and continued access to international markets.
Tactical considerations
There have been unconfirmed reports that Ukrainians destroyed the main mineshaft at the plant due to incoming Russian forces. Indeed, there have been social media posts about Russian troop presence in Udache and Kotlyne, however, these have not been substantiated.
The overall situation in this area has been deteriorating for a while. At the end of December, Russians captured Solone, opening the way for further advances to the north. The big question is whether they already managed to approach Udache and Kotlyne or whether they are still on the approach. Solone is located 121 m above sea level, while Udache is at 169 and Kotlyne is at 192. Thus, the terrain difference is substantial, given the distance between defending Ukrainian forces and attacking Russian units. If Ukrainians use the terrain to their advantage, they can slow Russian advances considerably. On the other hand, if Russians are near Kotlyne already (as Deep State depicts), then the pace of the Russian movement may continue.
Indeed, Kotlyne is defended by elements of the 155th Motorised Brigade. The brigade, which was trained in France and entered combat in late 2024, has suffered from poor command, poor training, a high desertion rate, and high losses. The brigade is not at full strength, and with poor morale, its combat effectiveness could be significantly degraded.
What is more, it does not seem that fortifications have been established in the area. While they are visible west of Pokrovsk, there are very few in areas between Solone and Udache/Kotlyne.
If the Russians capitalize on these weaknesses, they may be able to secure further advances and consolidate their positions further north. Given that the coke plant has already been closed, it is unlikely that Ukrainians will deploy additional forces to defend the area.
The capture of Udachne would bring Russians some 3 km from the Donetsk Oblast administrative border.
Conclusion
The halt of operations at Pokrovsk represents more than just the closure of a mine; it signifies a profound challenge to Ukraine’s economic stability and resilience. As the country navigates this loss, it will need to balance short-term import solutions with long-term strategies to diversify and rebuild its industrial base. The fate of Pokrovsk also serves as a stark reminder of the economic dimensions of modern warfare, where targeting critical infrastructure can have cascading effects on national strength and recovery potential.
PS. Please click here to access our Scribble Map, which shows daily frontline changes and both sides’ order of battle.
PS2. Despite our best efforts, please note that the unit locations and frontline positions are only approximate and should be considered indicative.
PS3. Fortifications made by Playfra0.
PS3. Maps created with the help of GIS Support. We're gradually making progress toward achieving the desired look for the maps.