KIEV Feb 27 Pro-Russian separatists in eastern
Ukraine said on Monday they would take control of Ukraine-run
businesses in rebel-held areas if the Ukrainian government does
not end a rail blockade that has halted coal supplies.
For the past month, a group of Ukrainian lawmakers and
veterans have blocked some rail traffic in eastern regions - a
move opposed by the government as it prevents coal produced in
separatist territory from reaching Ukrainian power plants and
the steel industry, whose exports are a keystone of the economy.
In a joint statement, leaders of the so-called Donetsk and
Luhansk People's Republics (DNR and LNR) said the blockade had
caused many businesses to suffer in rebel-held areas and that it
went against the spirit of the 2015 Minsk peace agreement.
"We are forced to announce that if by midnight on Wednesday
the blockade is not taken down, we will introduce a system of
external management on all companies registered in Ukraine's
jurisdiction that operate in the DNR and LNR," leaders Alexander
Zakharchenko and Igor Plotnitsky said.
They also said they would stop selling coal to Ukraine and
send future coal supplies to Russia or elsewhere.
Ukraine's largest steel producer, Metinvest, is
one of the biggest employers in eastern regions on both sides of
the front line. The blockade has already forced it to halt
production temporarily at one of its mills and several coal
Metinvest said it would be "unacceptable" for separatist
officials to take control of its businesses in rebel-held areas,
saying this would force it to halt the affected operations.
"In those specific businesses alone, almost 20,000 people
would face redundancy. This would inevitably be followed by the
dismissal of people at related businesses ... and contractors,
which would lead to social upheaval," Metinvest said in emailed
Heorhiy Tuka, Ukraine's deputy minister for issues relating
to rebel territories, dismissed the separatists' threat to seize
"It's an attempt to scare us," he said in a statement
published by website InfoResist, saying the separatists did not
have the ability to manage the large industrial companies.
In government-controlled areas, the economic impact of the
blockade is already being felt.
The government has warned that low coal stocks in power
plants could lead to rolling blackouts, while the central bank
has said it could take emergency measures if the supply squeeze
hits steelmakers' export revenue.
Ukraine stands to lose up to $2 billion in foreign currency
revenue if the blockade continues, according to President Petro
(Reporting by Pavel Polityuk and Natalia Zinets; Writing by
Alessanra Prentice; Editing by Robin Pomeroy)