In what promises to be a major milestone in more than two-and-a-half years of war, Russia is closing in on the capture of a vital industrial asset: a Ukrainian coal mine that’s a cornerstone of the country’s steel industry. 

Owned by Ukrainian firm Metinvest, the modern facility — opened in 1990 — is Ukraine’s largest mine for producing coking-coal, a specific grade used to fuel blast furnaces. It’s near the village of Udachne, about 10 kilometers west of the city of Pokvrosk, which is itself a key supply hub in Ukraine’s Donetsk oblast. Per the latest reports, the Russian army is reportedly just 8 to 12 kilometers east of Pokrovsk. Defensive lines have already been dug to Pokrovsk’s west, so Ukrainian units will have positions to drop back to if Pokrovsk falls.  

In an interview with The Economist, analyst Andriy Buzarov noted that the Russians don’t have to actually occupy the mine to remove it from Ukraine’s economic equation: They can do that by severing its power or destroying the principal road used to haul its product westward.  

Steel is one of Ukraine’s principal industries, accounting for about a third of exports before Russia’s invasion. At that time, Ukraine ranked 14th in global steel production; by last year, it had fallen to 24th place. This year, Metinvest expected to unearth 5.3 million metric tons of coal in the mine near Pokrovsk. 

Oleksandr Kalenkov, the head of Ukraine’s metals and mining industry lobbying group, explained the implications for the country’s steel industry when the mine falls under Russian control, telling Reuters it could slash projected 2025 steel production by upwards of 80%:

“We could make up to 7.5 million metric tons of steel by the end of the year and, for next year, we saw an increase in production to over 10 million, but if we lose Pokrovsk, then … we will fall to 2-3 million tons.”

It’s not just a matter of Ukraine switching to imports of the specialty-use coking coal. “We don’t know where to get coal if Pokrovsk is seized,” Urkraine coke association Ukrkoks head Anatoly Starovoit told Reuters. “It is difficult to bring it in by importing; today it is not so easy to bring it in by sea.” That’s because Ukraine’s ports are geared toward exports, to say nothing of military hazards. 

The handwriting was already on the wall...but Ukraine’s pending loss of this vital industrial asset will only accelerate growing Western resignation to the inevitability of a negotiated end to the bloody, US-led proxy war with Russia.