Metinvest is interested in Dunaferr, the company tells Kallanish, but declined to comment on whether it was in talks with authorities to purchase the troubled Hungarian flat steelmaker.
Dunaferr went into liquidation last month after a long period of well-publicised financial troubles, which were exacerbated last year by the growing energy crisis in Europe. It shut down one blast furnace in August followed by its second in September after its supplier refused to deliver coke feedstock.
“The loss of control over Metinvest’s enterprises in Mariupol has led to a substantial decline in domestic iron ore consumption in the country, while the aggressor’s [Russia] blockade of Ukrainian ports has made it practically impossible to export iron ore by sea,” Metinvest says. “As a result, Metinvest has been forced to suspend or partly curtail the operation of its own mining and processing plants.”
Dunaferr is a major coal and iron ore consuming plant in close proximity to Ukraine and Metinvest considers it necessary to monitor the situation at the Hungarian steelmaker, it says.
“For Ukraine, a functioning plant would provide work for Ukrainian mining and processing plants in Kryvyi Rih,” the company observes. “Metinvest is probably the only company in Europe that, thanks to its favourable geography and own iron ore production, can ensure continuous operations at Dunaferr and protect the plant from liquidation. That is why the group is demonstrating a certain interest in the developments at Dunaferr.”
Earlier this week, Hungarian media reported that, in a letter last month to Hungarian Prime Minister Viktor Orban, Metinvest chief executive Yuriy Ryzhenkov wrote that his company “is still considering Dunaferr as a potential valuable addition to the group”.
Reports suggest Metinvest is proposing an investment of €150 million ($162m) to restore production and maintain it at a level of at least 60% capacity. The Ukrainian firm would also carry out the investments necessary to reduce CO2 emissions from the steelworks by 55% by 2030, as required by the EU.
In November, Metinvest said its interest in US Steel Kosice may resume in future but the invasion of Ukraine by Russia is currently dampening any acquisition potential (see Kallanish passim).
Svetoslav Abrossimov Bulgaria
