China will pay for the revival of brown coal mining in Ukraine

Ministry of Energy and Coal Industry of Ukraine and China’s China Coal Technology & Engineering Group Corp. signed a framework agreement on cooperation in project development and mining of lignite in the Kirovograd region of Ukraine.

Commenting on the signing of the agreement, Yuriy Boyko, Ukrainian Minister of Energy and Coal Industry said that the realization of Chinese-Ukrainian joint project will contribute to the revival of brown coal mining in Ukraine. “This project marks the beginning of the revival of mining of brown coal. We expect that as a result of the project annual production of lignite in this area will be up to 2.5 million tons. Lion’s part of it goes to the production of electricity and thermal energy, the total power will reach 300 MW,” said the Minister.

The agreement provides for the involvement of Chinese investment and technology development in the restoration of brown coal near the city of Alexandria in the Kirovograd region, as well as construction of power plants. In addition, the Chinese side will contribute to the financing of the project. At the first stage, the project will attract funding in the amount of approximately $ 50 million from the Export-Import Bank of China, and the entire project will cost $ 300 million.

According to the press service of the Ukrainian government, if implemented, the project will be the first to restore the brown coal mining in Ukraine, which has been completely phased out several years ago. According to specialists, the project would be recouped in less than 5 years. It is noted that brown coal is characterized by a lower caloric value compared with other major energy sources, but because it is mined in safe conditions, it is much cheaper. Thus, the value of a obtained from brown coal calories five times lower than that of the Russian gas at current prices for imported energy.

Accoding to REGNUM News Agency, formerly Ukrainian authorities have repeatedly stated their plans to replace Russian gas to coal.