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OSCE says 36 mines flooded in conflict-stricken eastern Ukraine

The ongoing conflict in eastern Ukraine continues to disrupt the country's mining industry, which is largely concentrated in the Donbass region. The Organization for Security and Co-operation in Europe said in a report obtained by Interfax that about 36 mining operations have been partly or completely flooded in the area.

Disruptions to the energy supply and ongoing fighting have resulted in periodic blackouts, which affect water drainage systems at mining projects.

"As a result of the fighting, coal mining projects have been repeatedly cut off from an electricity supply, which has led to the shutdown of water drainage systems, completely flooding a number of operations," the Nov. 29 report on environmental and ecological issues in Donbass said.

The report stressed that the mines under the biggest threat were Aleksandr-Zapad, Uglegorskaya, Gorlovka and South Kommunar.

Flooding is also affecting the groundwater across the Luhansk and Donetsk regions of Ukraine.

"Levels of polluting substances [mercury, vanadium, cadmium, non-radioactive strontium] have increased by 1.1% to 1.2% in conflict areas," the report noted. "In some cases the increase has reached 17%."

During the conflict between Kievan government forces and separatist fighters, many mining projects have been forced to shut down operations. The leaders of the self-proclaimed breakaway People's Republic of Donetsk announced they had seized control of industrial facilities in the area at the beginning of March.

Steelmaker Metinvest BV, which holds significant assets in Ukraine, previously told S&P Global Market Intelligence that it was using all means at its disposal to recover assets seized by the separatists.

"For Metinvest, the current situation means a loss of EBITDA, however we are currently unable to name an exact figure," the head of Metinvest's Press Department said July 20.