The decarbonisation of Metinvest’s Ukrainian assets will require $9 billion in the next ten years, says the company’s operations director, Oleksandr Myronenko.
“We understand the company will not be able to implement such a project alone and we will need to attract resources from Western banks,” he noted at the Forbes Ukraine forum last week. “Unfortunately, this option is currently not possible. While the war is going on, it is very difficult to persuade banks to provide any financing for projects in Ukraine, so we plan to start modernisation after the end of hostilities.”
The company is now focused on supporting the Ukrainian assets’ current operations, he added.
According to Mironenko, capital investment this year is projected at $320 million, with operating expenses at about $350m. “These are standard repairs of blast furnaces, sintering machines, maintenance of GZK equipment and development of mine management in Pokrovsk,” he noted.
“We are currently at 65% of base capacity, but we clearly understand that when the hostilities are over and the infrastructure is fully restored, production will need to increase,” Mironenko said. “For this, people and working equipment will be needed, and that is why we are focusing on these two key goals.”
The group plans to build a green steel plant in Italy to compensate for the loss of Mariupol steel production and increase the capacity of Ukrainian mining and processing plants (see Kallanish passim). Metinvest is also eyeing increasing exports to the Middle East and North Africa.
In the first quarter, the group decreased production of crude steel by 5% quarter-on-quarter to 469,000 tonnes (see Kallanish passim). Hot metal output fell 5% to 403,000t. Compared to Q1 2023, Metinvest reduced crude steel output by 4% and pig iron by 10%.
However, the firm observed a surge in Q1 iron ore concentrate production, reaching 4.86 million tonnes, up 36% q-o-q and doubling on-year, after the opening of the Black Sea corridor for exports. Production of merchant iron ore products climbed 41% q-o-q and 100% on-year to 4.4mt. The increases were 31% on-year for pellet and 53% for concentrate as volumes were directed towards external sales.
Svetoslav Abrossimov Bulgaria
