Ukraine to start receiving coal from US for first time

KIEV: The United States is set to start shipping coal to Ukraine for the first time under a "historic" deal announced Monday that should help the crisis-hit nation end reliance on Russia.

The agreement inked earlier this month by US firm Xcoal Energy & Resources and Ukraine´s state-owned energy firm Centrenergo will see some 700,000 tonnes of coal delivered by the end of the year.

The move marks a sharp reversal for ex-Soviet Ukraine as it battles a Russian-backed insurgency, and a victory for US President Donald Trump, who championed the deal as he seeks to bolster the American coal sector.

US Commerce Secretary Wilbur Ross hailed the agreement to export thermal coal, saying it "has brought enormous benefit to our nation´s coal communities," one of Trump´s signature campaign promises.

In addition, the deal "will allow Ukraine to diversify its energy sources ahead of the coming winter, helping bolster a key strategic partner against regional pressures that seek to undermine US interests," Ross said in a statement.

Thermal coal, used in power plants and for heating, has a much lower market price than metallurgical coal.

Ukraine has been scrambling to acquire reserves of the fuel needed to keep thermal power plants running since cutting off deliveries from the separatist-controlled regions in the east of the country in March, even turning to Russia which it accuses of supporting the separatists.

The rebel regions had continued to supply the specific type of coal used for producing heating fuel to the rest of Ukraine even as the two sides waged a three-year war that has claimed more than 10,000 lives.

Speaking at the US Embassy in Kiev, Xcoal president Ernie Thrasher hailed the deal as "historic" and said the firm was "committed to serving Ukraine´s needs."

Xcoal is based in Pennsylvania, a state that flipped and voted for Trump in the November presidential elections.

Centrenergo boss Oleg Kozemko said the contract between the two companies "was signed to fulfil an agreement" reached between Trump and his Ukrainian counterpart Petro Poroshenko.

"The first shipment of 85,000 tonnes is expected in early September," said Kozemko, who insisted the supplies should help the country through the cold winter months.

US Energy Secretary Rick Perry said US coal will be "a secure and reliable energy source for Centrenergo and its electricity customers."

Ukrainian officials have previously called for a complete ban on coal imports from Russia, which is accused by both Kiev and the West of sending troops and arms to fuel the rebellion.

To supplement supplies, Ukraine has already turned to South Africa to source anthracite coal.

The United States and the EU have imposed sanctions on Russia, but efforts to make progress on a stalled 2015 peace deal have faltered as fighting has dragged on.

A fresh round of talks between the leaders of Ukraine, Russia, Germany and France failed to produce a breakthrough earlier this month.