ArcelorMittal Kryvyi Rih suspends its mining and steelmaking capacities due to disruptions in provision of logistics services by Ukrzaliznytsia

Kryvyi Rih Mining and Metallurgical Plant, PJSC ArcelorMittal Kryvyi Rih (AMKR, Dnipropetrovsk region) reports the shutdown of mining and steel production facilities due to disruptions in the provision of logistics services by JSC Ukrzaliznytsia.

According to a press release published on Wednesday, over the past month, the company has been unable to receive sufficient raw materials to ensure continuous production, leading to inventory levels dropping to critically low levels. The flux supply disruptions are systemic and are already threatening the stable operation of several key production units. This disruption has also caused a disruption in the company's iron ore concentrate shipments, leading to the suspension of ore mining.

"We are forced to acknowledge that this situation is the result of unforeseen circumstances, but rather the inadequate planning and distribution of shipments by Ukrzaliznytsia. Ensuring stable supplies for one of the country's largest industrial enterprises isn't a particularly difficult task, but in practice, it doesn't happen. They simply aren't delivering this key component of iron foundry production, without which we can't produce cast iron, which, as a result, has a serious impact on our entire value chain. Furthermore, they aren't providing trains for the shipment of the concentrate produced, forcing us to halt operations at the mining department," the plant said.

It is also added that, due to these circumstances, AMKR was forced yesterday to shut down one of its two blast furnaces, two sintering machines, and an ore-dressing plant until flux supplies are resumed and at least a minimum stock of this raw material is restored. If the situation does not improve within a few days, the second blast furnace will also be shut down.

"For our company, which has been operating at a loss for four years now and is simply trying to survive, given the critically high electricity tariffs, the introduction of the CBAM, and aggressive imports on the market, another problem with raw material supplies could be fatal," emphasized Mauro Longobardo, CEO of ArcelorMittal Kryvyi Rih.

According to the press release, if supply continues to be disrupted, the company will be forced to suspend operations at additional production units, including a second blast furnace, additional sintering machines, and another ore processing plant, which will have an even more devastating impact on production.

"We also note that, amid this situation, Ukrzaliznytsia continues to focus on increasing fares, whereas the key priority should be ensuring the quality, timeliness, and reliability of transportation. The current situation is already having a direct impact on production, the company's economic performance, and, consequently, on budget revenues at all levels," the message reads.

ArcelorMittal Kryvyi Rih expects Ukrzaliznytsia to take immediate action to stabilize supplies and restore predictability to logistics processes.

ArcelorMittal Kryvyi Rih also operates in wartime conditions, experiencing daily attacks on its plant and logistics infrastructure. Yet, despite the enormous challenges caused by the war, it is making extra efforts to maintain production. We expect the same from our service providers.

We remain open to constructive dialogue, but we emphasize that continued ignoring the problem will have systemic consequences for the Ukrainian mining and metallurgical industry, the metallurgical plant noted.

ArcelorMittal Kryvyi Rih is the largest rolled steel producer in Ukraine. It specializes in the production of long products, including rebar and wire rod.

ArcelorMittal owns ArcelorMittal Kryvyi Rih, the largest mining and metallurgical plant in Ukraine, and a number of smaller companies, including ArcelorMittal Beryslav.