Ukraine's Coal Assets
Total reserves of coal in Ukraine are 117.5 bln metric tons, including 56.7 bln tons of discovered reserves, from which 39.3 bln tons is thermal coal. Global economical crisis has led to a drop in Ukrainian steel production – that respectively influenced coking coal demand; energy consumption drop with most of the country’s industries – also caused with the crisis – has lowered a demand in thermal coal.
Currently about 45% of coal in Ukraine is being produced with private players – including their 55% share in coking coal production. At April 2009 the country’s Government announced further plans to privatize over 100 mines – but this was postponed due to political reasons.
The Ukrainian coal mining companies meet the global competition – both at domestic market (with the Russian coal suppliers) and in their export activity. Being the world’s 20th largest coal exporter Ukraine has to compete with the countries that precede it in the top-list (like Australia, China, Indonesia, or Russia).
From another hand currently the Ukrainian coal mining industry weakly depends on its export activity. Only 7.5% of coal extracted in Ukraine is being exported. Such low dependence on export makes the industry less vulnerable to the global commodity prices.
Want to know more about Ukraine's coal import shift from Russia to other sources as well as about coalmines privatization and coal transportation challenge? Ignatov & Company Group presents a comprehensive analysis for Ukraine's coal mining market in 2010-2011 in our new "Ukrainian Coal Market 2010-2011 - Brief Analysis" report.At October 2010 "World Coal" magazine published an article "A Battle Begins" written with Mr. Alexander Ignatov, our founder and president; this article contains analysis for the future privatization of coal mining assets in Ukraine. Three major players will definitely compete in coalmine privatization – SCM, ArcelorMittal, and the Russians – while China may also enter the game. Mr. Ignatov analyzes coal strategies with each of these "pretenders" - from SCM's "I want it all" game targeting 100% self-supply with coking and steam coal, to ArcelorMittal's CIS coal interests.
Source: Ignatov and Company Group
It's Just a Thought, but...
Ukraine’s total coal resources are estimated at 54 billion tonnes. Economically mineable coal reserves are estimated at a further 34 billion tonnes, of which 6.1 billion tonnes are located in active mines. Of these reserves, 3.5 billion tonnes are steam coal and 2.6 billion tonnes coking coal. Ukraine also has some lignite reserves. The main coal reserves (45.6%) are concentrated in the Donetsk coal basin. A further 34.2% of reserves are located in the Luhansk region, 15.3% in the Dnipropetrovsk region and the remaining 4.9% in the regions of Lviv, Volyn and Kirovograd.
Until 1970, three quarters of Ukrainian electricity was generated by coal-fired thermal power plants. Today, only one third of electricity is produced from solid fuels. The national economy is highly dependent on imported energy, in particular on natural gas and oil. Therefore, taking into account Ukraine’s considerable reserves, coal will remain the main indigenous energy source for decades to come, securing the country’s energy supply, as well as its economic and political independence.
The "Energy Strategy of Ukraine" plans an increase of indigenous coal extraction, in order to secure the country’s energy supply, which for the moment is too much dependent on imported gas. The long-term development of the coal industry will be implemented in three stages. The first stage (2011 – 2015) aims to restructure the coal industry. State-owned mines will be privatised and uncompetitive mines closed or restructured, in order to make them attractive for investors. Total coal output will not be allowed to decrease because there are no other energy sources able to bridge any shortfall. The second step (2015 – 2020) foresees the upgrading and modernisation of privatised coal mines by their new owners. In the third step (2020–2030), stable growth of the coal industry will be achieved.
Currently, 149 mines are operating in Ukraine, including 120 state-owned and 29 private mines. The coal industry in Ukraine employs about 271,000 people. Ukraine’s coal sector includes projects on coal mining processes, such as coal preparation, the development of new mines and mining engineering. Scientific and research institutes, development laboratories and technological institutes also work for the coal industry.
The total coal output can be increased to 115 million tonnes in 2030 (including up to 75 million tonnes of steam coal) as a result of implementing the three-stage development strategy. Ukraine figures amongst the top-ten coal-mining countries of the world. However, its technical and economic parameters, and its occupational health and safety situation, must still be improved. The main factors that influence health and safety in Ukrainian coal mines are difficult geological conditions and outdated equipment.
The average depth of Ukrainian mines is some 700 metres, the deepest mine being 1,332 metres, and some preparatory work is being undertaken at a depth of 1,386 metres. High-level scientific support is required for such operations. However, a lack of funding since 1991 has drastically reduced the number of scientists and engineers engaged in scientific research, to the detriment of health and safety.
As a result of the restructuring of the mining sector, 101 mines are being closed down, part of an ongoing process that has seen coal production decrease from 129.3 million tonnes in 1991 to 54.4 million tonnes in 2010. DTEK, the largest vertically integrated private energy company in Ukraine, produced 19.2 million tonnes. Much of the remaining output came from state-owned-mines.
The productivity of Ukrainian miners is rather low at 28.3 tonnes per month per miner. State-owned mines have a productivity of 21.5 tonnes, whilst private mines have a productivity of 42.2 tonnes per month per miner.
The quality of the extracted coal over the last twenty years has largely remained the same and, taking into account the modernisation of power plants, there is a real opportunity to improve the quality of delivered coal.
The energy policy of the Ukrainian government is aimed at adapting enterprises to the market environment and expected coal industry restructuring and privatisation. DTEK is a good example of how effective management in a post-privatisation period can make coal mining competitive.
In 2002, the Komsomolets Donbassa mine with a production of 2.1 million tonnes became part of DTEK and since then the output has steadily increased. In 2010, the mine produced 4.1 million tonnes of coal with a productivity of 90.9 tonnes per month per miner. In June 2004, DTEK privatized the ten mines belonging to PAVLOGRADUGOL OJSC, with an annual output of 11.4 million tonnes. Currently, PAVLOGRADUDOL is the biggest coal mining enterprise in Ukraine, with an output of 15 million tonnes in 2010. The average productivity is now 72.4 tonnes per month per miner.
Early in 2011, DTEK strengthened its position on the coal market, signing an agreement with the Regional Department of the State Property Fund of Ukraine in the Donetsk Region on renting the state-owned coal company DOBROPOLYEUGOL in the town of Dobropolye in the Donetsk Region. It is expected that by 2015, investments will have increased the company’s coal output from 2.8 million tonnes to 5.2 million tonnes per year.
The key for the successful operation of DTEK’s coal assets is the development concept designed by the owner and providing for upgrading of operations, application of advanced management methods and better health and safety.
Or am I wrong? I could be you know.... sometime. Not often, but, I am human.
With automotive companies finally coming to grips with the fact that the only way for them to meet future fuel efficiency requirements is to use lighter materials - aluminum vs. steel, why not convert to carbon fibre on a mass scale instead?
Too expensive and...too durable
“Carbon fiber is a very interesting technology, but I would say that it has two conditions which make it unsuitable for vehicle application,” argued Yamashita. “Number one is it's very expensive; number two is it's too durable."
Yamashita noted that carbon fiber can last more than 30 years.
"We don't need such a material...That means we cannot sell a new car in 30 years,” Yamashita quipped, adding that only if we see a sea-change in how cars are seen, and we start recycling platforms and rebodying them, then he could make an argument for utilizing carbon fiber, which is an extremely durable technology.
Of course, 80 years ago we had people say that space travel was beyond our capabilities too.
Nothing is impossible. By 2020 we could have millions of carbon fiber cars on the road. Anyone willing to bet against me? All it takes is the will power and investment and it can become a reality. The price of carbon fiber cars could be reduced to less than $40,000 each. The material is virtually indestructible and lightweight.
Why not help to save the planet by increasing production of these carbon fiber cars?
This company cut the weight of a car in half...
Axon Automotive, and they have developed a new passenger vehicle that is capable of doing about 100mpg with a top speed of 90mph using regular pump gas.
The car will be released as a 2010 model, with no official name or price yet. We just know it will be considered “affordable”. The main question that came up for me was safety. I’d like to know how the car handles in an accident scenario as opposed to a car made out of aluminum/steel. Is it just as safe? What about expenses to fix after an accident? Is it cost effective? These are all questions that will be answered as we get closer to a release date. In the meantime, it’s a huge step towards the carbon fiber movement, and we’re looking forward to it.