State-owned heating company Centrenergo will import 700,000 tons of coal from American miner Xcoal Energy & Resources by the end of 2017, Centrenergo CEO Oleh Kozemko announced at July 31 press conference at the U.S. Embassy.
“This is a result of an agreement reached by the two presidents of our countries,” Kozemko said, joining with XCoal CEO Ernie Thrasher in hailing the move as “historic.”
Kozemko said that the price of the first delivery – scheduled to go via ship from the Port of Baltimore to Odesa in early September – would be priced at $113 per ton.
With the first delivery amounting to 85,000 tons of coal, that will come to a rough initial price tag of $9.6 million for Centrenergo. Kozemko added that the price of subsequent deliveries is not fixed and subject to change.
Last year, Centrenergo imported anthracite coal from South Africa at a maximum price of $80 per ton and from Russia at a maximum price of $67 per ton.
Politically, the move comes as U.S President Donald Trump is set with fulfilling his campaign promise of reviving the American coal industry. He said in June that Ukraine needed “millions and millions of metric tons” of heating coal.
U.S. Commerce Secretary Wilbur Ross and U.S. Energy Secretary Rick Perry, who will visit Ukraine at the end of August, both issued statements of praise for the deal.
The development also follows months after activists stopped Centrenergo from receiving coal from mines located on Russian-backed separatist-held territory belonging to Ukrainian oligarch Rinat Akhmetov.
Ukrainian power stations rely on anthracite coal, a variety plentiful in the Donbas mining region, much of which is currently occupied by Russian-backed separatist forces. The blockade forced Centrenergo to look for alternative coal sources.
“You all understand what kind of coal we were built for – Donetsk, Luhansk, coal from the Donetsk basin,” Kozemko said at the press conference.
Both Thresher and Kozemko said that the agreement came after the U.S. Commercial Service and U.S. Department of Energy began arranging meetings between the company and representatives of Pennsylvania mines.
Centrenergo officials visited Pennsylvania in June, as President Petro Poroshenko discussed Ukraine’s need for coal with President Trump at their White House meeting on June 20.
Ukraine imported 15.6 million tons of heating coal last year for a total sum of $1.47 billion.
