Ukraine Mining Report 2012

Date: June 19, 2012
Pages: 52
US$ 1,175.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF), Download

Download PDF Leaflet

Ukraine's mining industry continues to muddle through a protracted process of restructuring, which in 2011 led it to simultaneously sign major deals with China on revamping coal mines and cooperate with the EU on shutting down its non-productive mines. Although the lack of political resolve and consensus continues to hamper privatisation plans for the country's state-owned mines, progress is being made on the sell-off. In contrast to a steady economic growth outlook in Ukraine over the coming years, we forecast an average real annual mining decline of 2.1% over 2011-2016, reaching US$10.1bn in 2016, from US$11.4bn in 2011.

All Ukrainian state-run mines will be privatised by the end of 2012 in a move announced by the Ukrainian Coal Industry Ministry in October 2010. Coal minister Yuriy Yaschenko outlined plans for the State Property Fund and said that the starting price of the companies will depend on their capital. A EUR8.9mn (US$12.89mn) facility provided to Ukraine by the EU in June 2011 was partly designed for this end. The funds are expected to be used to support mine privatisation efforts, with an eye towards eventual closures.

Indeed, the EU-backed Coal Sector Policy Support Programme concluded that Ukraine should shut down 29 of its non-productive coal mines by 2016. Additional mines may be included in the cull, however, if a follow-up study is conducted in 2012 and 2013. In any case, the mine closures – expected to take 15-24 months for an individual mine – will carry a direct cost of around UAH4bn (US$495.07mn).

Meanwhile, we believe that a coal agreement signed between Ukraine and China in September 2010 will not have a significant impact on Ukrainian coal production in the short term. Looking ahead, however, we believe the agreement could go some way in enabling Ukraine to become completely self-sufficient in coal and bring an end to the country's dependence on imports to satisfy most of its petroleum and natural gas demand.

Collaboration between Ukraine and China on the renovation and modernisation of coal mines kicked off in June 2011, when the US$1bn programme's first project began. Ukraine's Lysychanskvuhillya signed an agreement with research and engineering firm Tyandi for the upgrade of the Melnikov coal mine as a pilot project of the programme. The US$1bn in investment from China is also partly expected to be used for the construction of new mines in Ukraine.
Executive Summary
SWOT Analysis
Ukraine Mining Industry SWOT
Ukraine Business Environment SWOT Analysis
Global Mining Outlook
  Table: Recent Tax Increases
  Table: Largest Coal Projects
  Table: Major Frontier Mining Projects
Europe Mining Sector Outlook
  Table: Major Nordic Mining Projects
  Table: Key Gold Projects In Eastern Europe
Industry Trend Analysis
  Table: Mines In Ukraine
Iron Ore
Industry Forecast Scenario
  Table: Ukraine's Mining Industry Value & Production Forecasts
Industry Forecasts
Gold: Minimal Growth Ahead
  Table: Ukraine – Potential Gold Projects
  Table: Ukraine's Gold Production
Iron Ore: Production Growth Amid Weakening Economic Outlook
  Table: Ukraine's Iron Ore Production
Coal: Modest Growth Ahead
  Table: Ukraine's Coal Production
Regulatory Structure
Europe Business Environment Ratings
  Table: Mining Business Environment Risk/Reward Ratings
Competitive Landscape
Company Profiles
  Table: Metinvest – Financial Results
Ferrexpo Poltava Mining
Commodity Strategy
Copper To Edge Lower
Aluminium: No Sustained Recovery Ahead
Oil: Prices To Pull Back
Gold: Still Bullish
Business Environment Ratings Methodology
  Table: Mining Business Environment Indicators
  Table: Weighting Of Components
Skip to top

Ask Your Question

Ukraine Mining Report 2012
Company name*:
Contact person*:
Request invoice
Your enquiry:
Please click on a Check Box below to confirm you are not a robot: