Environmental costs in the mining & metals sector grew by 25–30% in 2018

Environmental costs of mining & metals companies amount to around 40% of their total costs

Environmental costs of iron ore mining companies in 2017—2018 grew by 30.3%, up to UAH 7.3 billion, and steelmaking companies — by 25.5%, up to UAH 5.9 billion. The shares of these sectors in the total volume of environmental costs nationwide in 2017–2018 grew from 17.7% to 21.4% and from 15% to 17.35% respectively.

In 2018, the growth of environmental costs of mining & metals companies outpaced production results, as such costs usually grow depending, to a certain extent, on an increase in production figures, which, unfortunately, were not impressive last year. In 2018, Ukrainian steelmakers increased the output of pig iron by 2%, up to 20.5 million tons, and rolled products — by 0.2%, up to 18.3 million tons.

At the same time, production of steel dropped by 1.5%, down to 21.1 million tons, and iron ore concentrate — by 0.3%, down to 60.3 million tons, compared to 2017.

In general, capital investment of iron ore mining companies in environmental protection in 2018 amounted to UAH 1.7 billion, or 15.3% of the total volume nationwide, and steelmaking companies — UAH 2.8 billion, or 25.2%.

Measures for air protection and climate change mitigation dominated in the structure of environmental capital investment of steelmaking companies in 2018 — UAH 2.3 billion. They were followed by waste management, UAH 295.6 billion, and wastewater treatment, UAH 179.7 million.

In turn, environmental measures of iron ore mining companies included:

• protection and rehabilitation of soil, groundwater and surface waters — UAH 1 billion;
• wastewater treatment — UAH 267.6 million;
• waste management — UAH 281.9 million.

The highest environmental costs in 2018 were reported in: Dnipropetrovsk (UAH 9.5 billion), Donetsk (UAH 3.7 billion), Zaporizhzhia (UAH 3.5 billion), Kyiv (UAH 2.5 billion) and Poltava (UAH 1.7 billion) oblasts, and in Kyiv (UAH 4.6 billion).

For more details about investment and environmental costs of mining & metals companies see infographics of GMK Center.