Inhulets Mining and Processing Plant (Inhulets, Kryvy Rih, Dnipropetrovsk region), part of the Metinvest mining and metallurgical group, is standing idle due to high electricity prices.

"According to current electricity prices, I don't understand how ferroalloy plants can operate. This is a problem for us too. For example, Inhulets Mining and Processing Plant has not been operating for several months due to the high cost of electricity and logistics," the holding's CEO Yuriy Ryzhenkov said in an interview with Forbes-Ukraine.

He specified that there is a government decision according to which the enterprise must import 80% of the electricity it consumes so that it is not turned off. It is very important for Metinvest that there are no sudden shutdowns, as this is unsafe and can damage the equipment.

"I don't know how they calculated 80%. Previously, this quota was 30%, perhaps now this would also be enough," the CEO noted.

He explained that the problem is not that it is necessary to import electricity. In Ukraine, prices are no lower than in Europe. The problem is that auctions for access to the cross-section are frantic, since large consumers need to purchase 80% of their consumption. The greater the competition for the cross-section, the more you need to pay for it.

According to the top manager, it often happens that the company pays more for the cross-section than for the electricity itself. That is, it overpays at least twice. Another problem is that these auctions are daily. That is, you cannot buy a cross-section for months, six months, a year and have predictability.

"That's why when we come to the auction, we buy the section at any price. We have no other choice. Either overpay or stop. We have repeatedly drawn the attention of the country's leadership to this problem. I hope that the Ministry of Energy will hear us. We need long-term contracts. In the EU, you have predictability for months. In Ukraine - per day," Ryzhenkov stated.

InGOK specializes in the extraction and processing of ferruginous quartzites of the Inhulets deposit, located in the southern part of the Kryvy Rih iron ore basin. It produces iron ore concentrate. The production capacity of the enterprise is 14 million tonnes of iron ore concentrate per year.