Metal production in Ukraine

Geographic distribution of ferrous and non-ferrous output, expressed in monetary value per capita.

Metal production, in particular iron and steel industry, is the dominant heavy industry in Ukraine. Ukraine is the world's eighth largest producer and third largest exporter of iron and steel (2007).[1] Ukrainian iron and steel industry accounts for around 2% of worldwide crude steel output,[2] 5% to 6% of the national gross domestic product and 34% of Ukrainian export revenue (2007 data).[3] In 2007 it employed 420,000 people – 10% of industrial labor and 2% of the total workforce.[3] It has the highest, by a wide margin, revealed comparative advantage of all branches of the Ukrainian economy.[4] The industry peaked at 42.8 million tonnes in 2007[5] but has been gravely affected by the financial crisis of 2007–2010 and declined to 29.8 million tonnes in 2009.[2]

Ukraine possesses substantial natural reserves of iron ore. Ore mining exceeds the demands of domestic steel mills, but export potential is weakened by high extraction costs.[6] The Ukrainian iron and steel industry is concentrated in central (Dnipropetrovsk, Kryvyi Rih, Nikopol), southern (Zaporizhia) and eastern (Donets Basin, Mariupol) regions of Ukraine. There are 14 iron ore mining companies, 15 iron and steel mills, and three ferroalloy plants.[3] Most of iron and steel is produced by large mills with annual capacity of between 4 and 7 million tonnes.[6] As of 2006, 44.6% of Ukrainian steel was produced in obsolescent open hearth furnaces;[6] modernization of plant and coping with rising energy costs are the main challenges to the future of Ukrainian steel. The Ukrainian steel industry has been privatized since the 1990s but the coal mines are still owned by the government and experience chronic financial problems.[7]

Ukraine is also a significant producer of manganese, manganese ore and manganese ferroalloys and has 75% of the ore reserves of the former CIS.[6] The aluminium industry concentrates in Mykolaiv and Zaporizhia but is limited by energy availability and costs.[5] Ukrainian production of uranium in the Dnipropetrovsk Oblast provides only 30% of domestic demand.[7]

History

Copper Age

Metal production in Ukraine developed along the same lines as that of it near neighbours. The Stone Age and Copper Age boundary was unclear as most peoples retained Stone Age tools and used them alongside Copper Age tools.

The Trypilian culture began in East Ukraine and existed from 5400 to 2000 BC. It is named after a site in the Kiev (Kyiv) region near Trypilia uncovered by Vikentiy Khvoyka in 1898. In the West of Ukraine the Sredny Stog culture (4500-3500 BC) was the main influence along with the Catacomb culture (2800-2200 BC) and it is during these times that we see the earliest examples of copper technology in the form of fishing hooks and other implements around 2500 BC.

Iron Age

During the Iron Age there were several influences on metallurgy: the Dacians, Cimmerians, Scythians, Sarmatians, among other nomadic peoples. The Scythian Kingdom existed here from 750 BC to 250 BC.

Ancient period

The ancient Greek colonies founded in the 6th century BC on the north-eastern shore of the Black Sea, the colonies of Tyras, Olbia, Hermonassa, continued as Roman and Byzantine cities until the 6th century AD.

Middle Ages

4th century to 15th century

Early Modern

16th to 18th century

19th and 20th centuries

Ferrous metals production in millions of Tonnes
Year Iron Steel Rolled steel Steel Pipe
1913 2,0 2,4 2,1 0,07
1928 2,4 2,4 2,0 0,11
1940 9,6 8,9 6,5 0,56
1950 9,2 8,3 6,9 0,92
1960 24,2 26,2 21,1 2,22
1970 41,4 46,6 37,4 4,49
1978 38,0 56,7 37,6 4,00

Natural resources

Mining of principal raw commodities, thousand metric tonnes[8]
Commodity 2003 2004 2005 2006 2007
Alumina 1,434 1,562 1,632 1,672 1,700
Anthracite 14,427 18,295 16,204 13,444 13,000
Bituminous coal 63,866 62,100 58,000 66,600 62,255
Iron ore (pure Fe content) 34,300 36,000 37,700 40,700 42,800
Manganese ore (pure Mn content) 880 810 770 546 580
Titanium ores (pure Ti content) 314 283 286 344 362

Ukraine possesses world's largest reserves of commercial-grade iron ore - 30 billion tonnes of ore or around one-fifth of the global total.[9] Adjusting for pure iron content the Ukrainian reserves (9 billion tonnes of iron, 11.6% of the global total) are the world's third largest after Russia and Australia.[9] Iron ore mining is concentrated in Kryvyi Rih Ore Basin and 80% of it is controlled by the Ukrrudprom.[6] Open-pit mining companies are capable of extracting 90 million tonnes annually whilst underground mining contributes another 18.5 million.[8] Actual ore extraction, according to the United States Geological Survey, peaked in 2007 at 77.9 million tonnes of ore (42.8 million tonnes of pure iron content).[8]

Ukrainian reserves of hard coals are concentrated in the Donets Basin. More than two hundred coal mines of Donbass account for 90% of Ukrainian coal output; the balance comes from 18 mines in Lviv Oblast and Volyn Oblast.[8] Metallurgical-grade coals account for 54% of national coal reserves.[7] In the 2000s the mix of Ukrainian coal output shifted in favor of energy coals and the steel mills compensated for the deficit of metallurgical coals with imports of coke from Russia (7 million tonnes in 2007) and other countries.[7] Coal mining in Donbass is in continuous financial distress: the majority of coal mines, owned by the government, operate at a loss and require regular financial aid.[7] Labor productivity in the Ukrainian coal industry is three to eight times lower than in Russia, Central Europe and the United States.[7]

Economically viable manganese reserves in Ukraine are estimated at 140 million tons, or one-quarter of world's reserves (2010 data).[10] They are spread over the Nikopol manganese basin which spans across Dnipropetrovsk, Kherson and the Zaporizhia regions on both sides of the Dnieper River.[11] There are also three lesser manganese ore provinces which are not used commercially – Kerch, Burshtyn and Haivoron.[11] Total reserve base of 520 million tons stands at 10% of the global reserve base which is dominated by South African resources (2008 data).[12]

Ukrainian underground uranium and thorium mines are located in the Kirovohrad Oblast and are depleted by 50 to 60%.[7] Their output, refined at the VostGOK plant in Zhovti Vody, meets only around 30% of national demand (2007 data).[7] Ukraine has developed an ambitious program to expand uranium mining and production starting with the development of the Novokonstantinovskoye field.[13]

Ukraine also possesses substantial reserves of scandium (as a byproduct of iron ore processing),[14] titanium (as both ilmenite and rutile),[15] zirconium[16] and mercury.[17] Mercury mining and processing by the Nikitovka Mines in Horlivka ceased in 1991 and the mine equipment has been partially converted for fluorescent lamp recycling. Emission of mercury from burning high-mercury Horlivka coals remains an environmental hazard.[18]

Iron and steel industry

Metal production, thousand metric tonnes[8]
Commodity 2003 2004 2005 2006 2007
Primary aluminium 114 113 114 113 113
Ferromanganese250375.99359373368
Ferronickel6060609090
Ferrosilicon250248.06228169218
Silicomanganese7401,0601,0461,1681,281
Gold (USGS estimate) 0.50 0.50 0.50 0.50 0.50
Pig iron 29,570 31,060 30,747 32,926 35,600
Crude steel 36,900 38,738 38,636 42,899 42,830
Refined lead (USGS estimate) 13 15 61 56 62
Uranium 0.68 0.68 0.68 0.68 0.72

In 2000-2007 ferrous metallurgy expanded owing to a global rise in demand and prices. In 2007 crude steel production peaked at 42.8 million tonnes. 78% of it was exported—mostly to Italy, Russia and Turkey.[19] Primary pig iron and secondary steel production is dominated by seven large steel mills with an annual capacity of 4 to 7 million tonnes. The industry has seen a pattern of consolidation into vertically-integrated companies and their ownership changes with continuing mergers and acquisitions. Key players are Kryvorizhstal (ArcelorMittal), Evraz, the Industrial Union of Donbas, Midland Group, Privat Group and Metinvest (SCM Holdings).[19]

Non-ferrous metals

Ukrainian manganese industry is controlled by Privat Group.[6] Primary manganese smelting concentrates in the towns of Marhanets and Pokrov. Secondary manufacturing of ferroalloys and silicomanganese is spread between Nikopol Ferroalloy Plant, controlled by Interros, and lesser plants in Zaporizhia, Stakhanov, Kostyantynivka, Kramatorsk controlled by Privat.[6][8] Total production of ferroalloys in 2007 reached 2 million tonnes.[8]

Ukrainian aluminium industry consists of an alumina refining plant in Mykolaiv and the ZALK aluminium smelting plant in Zaporizhia, which is controlled by RUSAL.[5] Annual capacity is estimated in excess of 1 million tonnes of refined alumina. Only a fraction of it is processed domestically,[5] with a fairly constant production of 0.11 million tonnes of primary aluminium (2003–2007),[8] or 0.3% of global output.[20] Development and the very existence of aluminium smelting depends on securing sources of affordable energy.[5] In 2007 ZALK coped with a 24% increase in electricity prices; in 2008 it faced a 45% price increase and shut down some of its electrolytic smelters.[21]

Notes

  1. ↑ Oxford Business Group 2007, p. 100.
  2. 1 2 Global Crude Steel Production in 2009 down 8% on the same 2008 period. Iron and Steel Statistics Bureau (London).
  3. 1 2 3 Levine et al., p. 44.1
  4. ↑ RCE=38.5 in 2006 (OECD 2007, p. 108, table 3.1)
  5. 1 2 3 4 5 Levine et al., p. 44.2
  6. 1 2 3 4 5 6 7 Levine et al., p. 44.3
  7. 1 2 3 4 5 6 7 8 Levine et al., p. 44.4.
  8. 1 2 3 4 5 6 7 8 USGS tables accompanying The Mineral Industry of Ukraine 2007 (MS Excel). 2007 Mineral Yearbook. United States Geological Survey.
  9. 1 2 MCS-2010, p. 79. The global total does not include the bulk of American reserve base which is of too low grade to be commercially viable.
  10. ↑ MCS-2010, p. 99. South African reserves stand close at 130 million tonnes.
  11. 1 2 Margantsevye rudy Ukrainy (Марганцевые руды Украины) (in Russian).
  12. ↑ MCS-2008, p. 105.
  13. ↑ Levine et al., pp. 44.4-44.5.
  14. ↑ MCS-2010, p. 141.
  15. ↑ MCS-2010, p. 173.
  16. ↑ MCS-2010, p. 187.
  17. ↑ MCS-2010, p. 101.
  18. ↑ Mercury Exposure in Ukraine. United States Geological Service. Note: Article uses Russian toponyms, i.e. Gorlovka for Ukrainian Horlivka.
  19. 1 2 Oxford Business Group 2008, p. 117.
  20. ↑ 2007: 114 of 36,900 thousand tonnes. MCS-2010, p. 17.
  21. ↑ ZALK ostanavlivaet proizvodstvo (Запорожский алюминиевый комбинат останавливает производство) Korrespondent.net based on Kommersant Ukraine publications. November 4, 2008 (in Russian).

References

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