ArcelorMittal Kryvyi Rih calls on the government to reconsider the norm for imports of at least 80% of electricity

In such conditions, further production becomes significantly unprofitable, and competitiveness on the global market decreases

According to the results of electricity import in May-June of this year and the analysis of its impact on the economy of the enterprise, the region and the state, ArcelorMittal Kryvyi Rih has joined the position of a number of other energy-intensive enterprises of Ukraine, who previously expressed their concern about the unreasonably inflated requirement of mandatory electricity import. This is stated in the company’s letter, which is available to GMK Center.

On June 1, the Government decided that the guarantee of unlimited electricity supply will apply only to those enterprises that will import at least 80% of their consumption.

This appeal to the Government is caused by the negative consequences for the enterprise, the industry, the region, and budgets of various levels.

Considering the highest prices in Europe for electricity in Poland, Slovakia, Hungary and Romania, from where it is imported, the need to spend additional funds on its transportation and pay customs and excise duties, the price of imported electricity for our enterprise is more than 2 times higher than the price of electricity paid by its competitors in the countries of Western Europe.

In such conditions, further production becomes significantly unprofitable and the plant cannot be competitive on the world market of metallurgical products.

Hence the company will be forced to significantly reduce production and lay off approximately 1,200 employees. On the scale of the economy of the region and Ukraine, this will undoubtedly lead to the following negative consequences:

•  reduction of tax payments from personal income tax and social security to UAH 30 million per month;
• reduction of fees for subsoil and environmental payments by about 60 million hryvnias per month;
• reduction of VAT on the import of raw resources by about UAH 120 million per month;
• a decrease in foreign currency receipts by approximately 90 million US dollars or 3.6 billion hryvnias per month due to reduction in the export of finished products.

«Such decisions of the Government require thorough calculations and justification, and they necessitate search for a balanced solution for the industry, and consequently, for the economy of the country as a whole. We call on the Government to review the decision and reduce the obligation the national minimum volume of electricity imports to the level of 50% during the year, by making changes to the Resolution of the CMU dated May 30, 2024 No. 611,» said Mauro Longobardo, CEO of ArcelorMittal Kryvyi Rih.

As GMK Center reported earlier, Interpipe has also expressed concern about the possible negative consequences of the Ukrainian government’s introduction of a new 80% electricity import requirement. This decision of the Ukrainian government may lead to numerous negative consequences for the domestic industry as a whole.