Eastern Conflict Slashed Ukraine Coal Output

Ukrainian coal production fell 22 percent in 2014 to 65 million tonnes after the pro-Russian separatist conflict disrupted mining operations in the country's eastern industrial heartland, deputy energy minister Yuri Zukov said on Friday.

The fall in output has led to severe shortages of coal at thermal power plants, which traditionally supply 40 percent of Ukraine's electricity, plunging the country into a power crisis.

Ukraine has had to buy coal from Russia and South Africa, although attempts to import Russian coal late last year were hampered by supplies being held up at the border.

These issues have been resolved, Zukov said. "They're not being blocked now. We're working," he told journalists, adding that around 620,000 tonnes of coal would be bought in January.

Coal reserves at thermal power plants stand at 1.4 million tonnes, compared with normal winter stocks of 4-5 million tonnes.

Turning to Russia for coal and power supplies has been a blow for Kiev, whose relations with the Kremlin are at an all-time low following Russia's annexation of Crimea in March and its involvement in the eastern conflict in which over 4,700 have been killed.

Zukov said negotiations were under way on future coal supply deals with South Africa, Australia and Vietnam. "We need an alternative to Russian coal," he said.

Reporting by Pavel Polityuk