ArcelorMittal Kryvyi Rih has been operating at a loss for the fourth consecutive year

The company’s CEO stated that the company cannot sustain the energy costs and requires solutions to maintain production

PrJSC «ArcelorMittal Kryvyi Rih» – the largest steel producer in Ukraine – is in a critical financial situation: the enterprise has been operating at a loss for the fourth consecutive year, and the focus is no longer on development, but on basic survival. This was stated by the company’s CEO, Mauro Longobardo, during his speech at the GMK Center round table «Electricity Market of Ukraine: Challenges for Industry and the Mining & Metals Sector».

“We have optimized everything possible. But without a systemic solution from the state, particularly regarding energy tariffs, we will not be able to continue operations. Our current task is not to earn more, but at least not to lose,” he emphasized.

The share of electricity costs in the price of products at ArcelorMittal has increased from 7% in 2021 to 20% in 2025. This trend renders steel and iron ore concentrate production financially unsustainable.

The enterprise requires at least $150 million in investments annually just to maintain a minimal level of activity. However, even a production volume of 3 million t of steel per year, which is the baseline for breaking even, does not guarantee profit – more than half of this volume is already unprofitable.

“In the current situation, we cannot even talk about a ‘green transformation’. Construction of electric arc furnaces, transition to DRI, and other investments totaling about $1 billion – all of this is not feasible now. First, we have to survive during the war, stabilize the situation in the post-war period, and only then will we be able to accumulate funds for strategic investments,” Longobardo noted.

Over the past three years, in order to keep the enterprise operational, the ArcelorMittal Group injected over $1 billion into its Ukrainian division.

The CEO stressed that the company continues to support the city’s economy: according to our calculations the plant’s payroll, taxes, land payments and the jobs it creates for external contractors constitute up to 50% of Kryvyi Rih’s budget. Today, nearly 20,000 people work at the plant, although in 2021 the staff exceeded 27,000.

“We are not asking for benefits or subsidies. We are simply asking for the opportunity to operate under fair and competitive energy prices. We urge the government to decide whether it is worth preserving one of the key sectors of Ukraine’s economy,” summed up Mauro Longobardo.

It should be recalled that earlier, ArcelorMittal Kryvyi Rih’s Chief Financial Officer, Pavlo Zadorozhny, emphasized that the company risks halting operations due to excessively high electricity costs. Currently, the enterprise has been forced to operate at a loss for the fourth year in a row, and support from the parent company cannot last indefinitely.