ArcelorMittal has told the Ukrainian government that it can no longer run Ukraine’s largest steel plant under safe and sustainable conditions, following four strikes in five weeks that killed five workers and caused extensive damage.
The announcement on Friday, September 25, concerns the company’s Kryvyi Rih facility in south-eastern Ukraine, which employs about 12,500 people and a further 3,500 contractors. The most recent attack on the plant was on September 21.
The suspension came as Russian airstrikes across Ukraine killed at least seven people in Kyiv on Friday and injured more than 50. A drone strike on a high-rise building in central Kyiv early on Friday killed a 14-year-old boy.
Kyiv Mayor Vitali Klitschko said 59 people had been injured in the attacks. Of those, 25 were receiving hospital treatment, including one person in a serious condition. Ukrainian President Volodymyr Zelenskyy described the attack as “absolutely savage and sickening”.
Russia has been using ballistic missiles and jet-powered drones in airstrikes across Ukraine. It denies targeting civilians in the war, which was triggered by its full-scale invasion of Ukraine in 2022.
ArcelorMittal has invested over $700 million to keep the Kryvyi Rih plant operating since the invasion began in February 2022. It now expects to record a non-cash impairment charge of around $1 billion as a result of the shutdown.
The closure adds to pressure on an industrial sector that was once a major source of export earnings. Ukraine’s steel sector previously accounted for 15 per cent of the country’s exports, while metallurgy contributed 7% of gross domestic product (GDP) last year.
The metallurgy sector has suffered at least nine separate ballistic missile attacks since August. Recent attacks have likely cost steelmakers close to $100 million, according to the information provided on the sector’s losses.
Metinvest, Interpipe, and ArcelorMittal Kryvyi Rih, described as Ukraine’s top three companies, have all suspended steel production. The extent and duration of the current halt at Kryvyi Rih remain unclear, as do the prospects for restarting production and arrangements for the plant’s workers.
Ukraine’s steel capacity had already been sharply reduced earlier in the war. In 2022, Russian forces occupied and destroyed the Azovstal and Illich plants in Mariupol, wiping out 40% of Ukraine’s steel production.
ArcelorMittal’s decision leaves one of Ukraine’s largest industrial employers unable to continue production after repeated strikes. The company has not set out a timetable for any return to operations, and the details of its discussions with the Ukrainian government have not been disclosed.
Comments (0)