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Ukraine to buy up to 700,000 mt of anthracite by October 15

Ukraine plans to buy up to 700,000 mt of anthracite by October 15, most of which will be imported from South Africa and the US, energy and coal industry minister Volodymyr Demchyshyn.

"We currently have 500,000 mt - 570,000 mt of anthracite in stock," Demchyshyn said at a government meeting late Monday. "So, we need extra 600,000 mt to 700,000 mt."

"Most of the coal will be imported by sea from South Africa, the US and other countries," Demchyshyn said. "We also expect imports from Russia."

Anthracite is Ukraine's most important coal type due to its high calorific content compared with other types of coal.

However, all domestic production of anthracite has been shut down due to military conflict between government forces and Russia-backed separatist groups in the Donetsk and Luhansk regions.

Demchyshyn said there was a risk that anthracite imports from Russia may get disrupted, but said the imports will be diversified enough to withstand any pressure.

"This [Russian imports] is a risk factor, but I don't see any other ways except to buy coal from all the suppliers we can," Demchyshyn said.

Ukraine needs to have up to 1.2 million mt of anthracite thermal power plant warehouses by October 15, when the six-month high-demand season officially begins, Demchyshyn said.

A ship carrying 80,000 mt of anthracite from South Africa is currently on its way and is expected to arrive in Ukraine within days, Demchyshyn said.

"We signed agreements with coal producers from South Africa that are ready sell us coal at less than $80/mt," Demchyshyn said.

The government recently approved a plan that allows state-owned Oshchadbank to provide Hryvnia 2 billion ($95 million) in loans to private power companies to secure coal purchases.

source: http://www.platts.com