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Ukraine Steel Production May Grind To A Halt Over Blockade

Ukraine Steel investor worried about blockade

Steel production in Ukraine could grind to a halt and severely impact economic growth if blockades against rail lines into rebel held territory by nationalists continue. Veterans and volunteers, tired of seeing the Ukrainian government in Kyiv providing an economic lifeline to pro-Russian separatists who are killing their brothers, sons, and daughters, as the conflict in ‘Novorossiya’ rages on, have blockaded train lines into Donbass for weeks now, shutting down coal delivery from Donetsk to Dnipropetrovsk and the ArcelorMittal steel plant in the region.

The Ukrainian central bank says that growth for the Ukrainian economy could be cut in half in 2017 if the blockade is not lifted and 75,000 jobs are at risk. The government of Petro Poroshenko had been looking the other way for years as Western Ukraine traded with the East and provided hard currency to the rebels for coal, and supporting the breakaway republics of Donetsk and Luhansk. A blackmarket in alcohol and other contraband also flourished along the economic passageways of the railroad lines.

For its part, the coal mines controlled by the rebels in Donetsk will now supply the natural resource to Russia, which is only too eager to help. Russia has also recently began accepting documents from the rebel held areas in a possible prelude to diplomatic recognition or outright annexation of East Ukraine.

Ukrainian nationalists see their quest as a way to force Ukraine to not be economically dependent on rebel areas for resources.

A statement from the Luxembourg-based company, ArcelorMittal said it had developed a “crisis plan of operation” due to the “emergency state” of the energy sector, reports AFP. The global corporation is pressuring the Poroshenko government to do something about the issue.

The nationalists do not seem to be in a mood to give up their efforts and are threatening to shut down other economic avenues into Donetsk.

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