Ukraine's metallurgy faces huge losses due to railway blockade

The Ukrainian metallurgical sector will suffer huge losses if the railway blockade in the eastern region of Donbas continues, a senior industry official said on Tuesday.

"We estimated the decline in income due to the blockade at 3.5 billion U.S. dollars per year, which is half of the total income of the sector," Alexander Kalenkov, the head of the association of metallurgical companies "Ukrmetallurgprom", told reporters.

He said that the blockade will also lead to the loss of 75,000 jobs and will reduce tax revenues of the state budget by 150 million U.S. dollars in a year.

Ukraine's energy-intensive metallurgical sector is highly dependent on anthracite coal, which is produced in the Donbas areas now controlled by pro-independence insurgents.

The metallurgical enterprises faced serious coal shortages after a group of activists blocked the movement of trains, transporting coal and other raw products from the rebel-held area to the government-controlled territory in eastern Ukraine.

Metallurgy generates more than 20 percent of Ukraine's exports revenues and provides about 300,000 jobs. Endit