The industrial giant is under threat: ArcelorMittal may leave thousands of people out of work
22 August 19:09
Industrial giant ArcelorMittal Kryvyi Rih may shut down due to high electricity prices. Mykola Lukashuk, the head of the Dnipro Regional Council, announced the risks on his Facebook page, "Komersant Ukrainian" reports.
“There is a real threat of ArcelorMittal Kryvyi Rih shutting down. If the mining and processing plant is less than half full, it will hit the city with an increase in unemployment and social burden,” Lukashuk wrote.
employee “reservation” and new duties: what problems the industrial giant faces in 2025
In the first half of 2025, ArcelorMittal Kryvyi Rih faced a number of challenges.
In late February, the company requested an increase in booking quotas. By that time, more than 2,000 employees had been overbooked. But for stable operation, they needed an order of magnitude more specialists.
And in early July, Mauro Longobardo, CEO of Ukraine’s largest steelmaker, called on the government to impose a 25% import duty on rebar and wire rod to save the national steel industry from losing the market.
In a commentary to Delo.ua, Longobardo explained that after the United States closed the market for rebar and wire rod imports from some countries, such as Turkey, Algeria and Egypt, these volumes are now being redirected to other countries, including Ukraine. The problem, he said, is that the prices for such products are dumped, i.e. below cost, which poses a threat to local producers who cannot compete with such imports.
If a country is not protected by duties or quotas, such products quickly displace local ones. This destroys the industry from the inside,” the top manager emphasized.
He emphasized that even if the Government launches an anti-dumping investigation and it results in the introduction of a safeguard duty, the process will take several months, during which imports will have time to take up a significant Here is a paraphrased text in the form of a news story for the economic media, retaining the main idea and important details:
Why ArcelorMittal may leave Ukraine: CEO voices reasons
The company’s CEO Mauro Longobardo said that if the situation with high electricity tariffs does not change, ArcelorMittal Kryvyi Rih may leave the Ukrainian market.
The company was able to increase revenue by 50%, raising production from 1.5 to 2 million tons, but this did not help overcome the loss-making situation, as energy, logistics and tax costs increased.
Our volumes may be growing, but the cost is still higher than the market price,” Longobardo explained.
“One of the main reasons for the loss is the high electricity prices. According to the CEO, the company consumes 250 MWh, which generates additional costs of $200 million a year. In June, the price of electricity averaged $135/MWh, which is higher than even in the EU, not to mention France, where the price is $40/MWh due to nuclear generation.
We are not against energy companies making a profit. But when the cost price is $10, and they sell it to us for $135, this is not business, this is robbery,” Longobardo emphasized.
In addition to energy, the annual land tax of $40 million and infrastructure costs also put additional pressure on the company. In particular, he referred to the planned 37% increase in Ukrzaliznytsia’s tariffs, which was avoided only after negotiations.
If state-owned companies cannot survive, the government should help them, not us. We cannot pass these costs on to our customers, because prices are set by the global market,” the executive added.
Despite the financial difficulties, ArcelorMittal has already invested $1 billion to support the Ukrainian enterprise since the beginning of the war. However, if the government does not change its energy policy, the company may reconsider the feasibility of its presence in Ukraine.
We want to stay in Ukraine, but we need to feel that we are in the same boat as the government. If this is not the case, we will not be here either,” Longobardo summarized.
His comments come amid growing costs for Ukrainian industries trying to operate in the face of war, global competition and unstable energy policy.
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ArcelorMittal Kryvyi Rih announces its 2024 results: it failed to break even
Earlier this year, the media reported that ArcelorMittal Kryvyi Rih, the largest mining and metallurgical enterprise in Ukraine, had summarized its results for 2024. Despite attempts to adapt to the conditions of a full-scale war, the company remained unprofitable.
According to the company’s management, in the first half of 2024, metallurgical production operated at 50% of its design capacity, and the mining division at 70-75%. This is significantly lower than the pre-war figures, but better than in 2023, when some units were partially or completely shut down.
“2024 was a period of partial stabilization for us. We were able to increase volumes, but there are still a number of systemic challenges that prevent the company from becoming profitable,” commented CEO Mauro Longobardo.
“The company managed to increase production of steel and iron ore by 30-40% year-on-year. However, the production growth did not ensure financial stability due to high costs.
ArcelorMittal has invested more than $1 billion to support the Ukrainian plant since the start of the full-scale invasion. However, the future of the plant largely depends on concerted action by the government and business to create acceptable conditions for industrial giants to operate in the country.
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