DTEK boosts coal mining 12% m/m in October

Ukraine’s leading coal and power producer DTEK (DTEKUA) increased its coal production in Ukraine 12% m/m to 2.62 mmt in October, as can be seen from mining statistics presented by Energobiznes website on Dec. 2. On a year-over-year basis however, it was a 23% decrease in coal mining by the holding. The biggest Ukrainian miner of lean coal, DTEK-Komsomolets Donbasa mine, stayed idle in October after its closure in late July.

Ukraine’s total mining of steam coal amounted to 3.23 mmt in October, which is a 17% m/m increase yet 37% yoy drop. Mining of deficit grades of coal – lean and anthracite coal – rose 49% m/m in October to 0.94 mmt and by 31% for DTEK mines to 0.79 mmt. In 10M14, DTEK’s Ukrainian mines decreased coal output 8.3% yoy to 29.92 mmt, while Ukraine’s total mining of steam coal fell 13% yoy to 42.62 mmt.

Alexander Paraschiy: Increased mining of anthracite and lean coal in October – amid no ability to deliver it to power plants located in central Ukraine as well as limited capacity to stockpile it – might imply these mines were able to find some demand. Possible customers could be power stations located in or nearby the occupied territories of Donbas (like Starobesheve thermal power plant (TPP), Sloviansk TPP of Donbasenergo, and Luhansk TPP of DTEK), or foreign customers.

Yet we do not believe the amount exported could have been large, and DTEK’s Luhansk TPP reportedly does not receive any coal. Therefore, most likely, DTEK’s anthracite mines are continuing to stockpile their coal in eastern Ukraine, while three of its nine power plants are desperately seeking to import the same coal.