ArcelorMittal is shutting down its Kryvyi Rih plant, Ukraine's biggest operational steel works, after Russian strikes killed five employees and injured 17 more. The Luxembourg-based steelmaker expects a non-cash impairment charge of about $1bn from the closure, which includes an attached iron ore mine.
ArcelorMittal said strikes that killed five employees at its plant in Kryvyi Rih forced it to cease operations, leaving the company facing an impairment charge of about $1bn. The plant, about 400km south-east of Kyiv, had been hit by numerous missile attacks in recent weeks.
Attack killed five, injured seventeen
An attack on September 21 saw heavy strikes by Russia against Ukrainian plants and infrastructure, in retaliation for Kyiv hitting Russian oil production facilities. Five employees were killed and another 17 injured, with one still in critical condition, the company said. A day before that strike, Ukraine had launched its largest drone attack on Moscow, killing at least two people and hitting a major oil refinery.
The facility includes production of long steel rods and beams for construction as well as an iron ore mine, and is Ukraine's biggest operational steel plant. Ukraine lost control of its two former largest plants, Azovstal and Ilyich, to Russia during the 2022 siege of Mariupol. Russia has specifically named Kryvyi Rih as a target in government Telegram posts over the past month; the city is also the hometown of President Volodymyr Zelenskyy.
Company sought protection six times
ArcelorMittal had formally requested protection from the Ukrainian government at least six times during the war, according to a letter seen by the FT informing the government of the closure. The letter also cited additional taxes and tariffs that made the plant uneconomical to run.
Before Russia's full-scale invasion, Kryvyi Rih produced 4.9mn tonnes of steel and generated $4.1bn in sales in 2021, but has cut production by about two-thirds since 2022. The plant has burned through $500mn in reserves as well as a $700mn cash injection from its parent company trying to sustain operations amid blackouts, strikes and the closure of Ukrainian ports.
Broader campaign against steel industry
The attacks on ArcelorMittal are part of a broader campaign to take out Ukraine's steel production, local officials say. Russian ballistic missile strikes earlier this month also disabled the Zaporizhstal and Kamet Steel plants, both owned by Metinvest Holding. Oleksandr Vodoviz, head of the chief executive's office at Metinvest, told the FT last week: "As of today, [Ukraine] doesn't have a steel industry any more."
ArcelorMittal said the whole plant, including the iron ore mine, would be closed in the hope it could restart operations if there is peace in the region. The company is examining how many of the 16,000 on-site workers it will need to shut down operations safely. Closure takes several weeks, since the blast furnace, which typically burns at more than 1,500 degrees Celsius, must be cooled.
Source: Financial Times
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