Metinvest has a resource base for the production of green steel in Europe – company’s CEO

Metinvest has a good resource base in Kryvyi Rih, which can be improved to ensure the production of green steel in Europe. About this in an interview with the international television channel Bloomberg TV said the general director of the company Yuri Ryzhenkov.

«We are the source of the largest volumes of clean raw materials for the production of» green «steel on the European continent. Therefore, our strategy is to develop the production of green steel in Ukraine. Of course, we must wait until the military risks are significantly reduced so that we can make significant investments in the country,» he said.

At the same time, the group is considering the possibility of building or acquiring new facilities for the production of green steel outside Ukraine, which will work on Ukrainian raw materials. One of these plants is planned to be built in Italy. In addition, the group is open to other opportunities, including the acquisition of assets in neighboring countries.

Currently, Metinvest produces about 5.5-6 million tons of steel compared to pre-war volumes of 14 million tons, metal products are supplied mainly to Ukrainian consumers. In addition, the company exports significant volumes to Europe – mainly to the Mediterranean region, Poland, Slovakia, Romania and Bulgaria.

According to Yuri Ryzhenkov, even during the onset of peace, it is almost impossible for the company to return to the pre-war level, since the volume of 14 million tons included the production of two large Mariupol metallurgical plants – Azovstal and Ilyich Iron and Steel Works. These enterprises are destroyed, now there is no question of their restoration.

«We will consider the possibility of building new plants for the production of green steel plants for the production of decarbonized steel. This is the future of the Ukrainian metallurgical industry. By the way, now we are working on the construction of such a plant in Italy. This pilot project, which we will implement in partnership with Danieli, will become the basis for scaling when the restoration of Ukraine and the construction of new capacities begin», said Metinvest CEO.

Yuri Ryzhenkov also explained how much steel Ukraine will need for post-war recovery, and whether it needs volumes larger than it produces now. According to him, at the moment the country has a very low consumption of steel: about 100 kg per person per year, while in Eastern Europe this figure ranges from 300-500 kg per person per year.

«That is, Ukraine can increase steel consumption by about 3-5 times. In addition, even now the country exports about 80% of the steel produced. Consequently, the volumes that Ukraine produces now will be enough to meet domestic demand, even if the country reaches world benchmarks, «he said.

These volumes, explained Yuri Ryzhenkov, cover the restoration and construction of the necessary infrastructure.

Metinvest CEO also commented on the company’s work in the context of Russian attacks on Ukrainian energy. According to him, the group already relies on electricity imports and on its own generation for its assets. However, the last massive shelling caused interruptions in the work of Metinvest.

«But most large industrial companies already have a Plan B or Plan B to operate during such attacks. For example, Metinvest has its own generation, which allows us to avoid any technological disasters in the event of a power outage. And we can either take businesses out idle or wait for electricity supply to resume. But in general, Ukraine now has a very unreliable electricity supply, «said Yuri Ryzhenkov.

As GMK Center reported earlier, Metinvest, in the second quarter of 2024, reduced the production of total iron ore concentrate by 17% compared to the previous quarter – to 4.03 million tons. Output of commercial iron ore products for the period fell by 14% q/q – up to 3.81 million tons, in particular concentrate – by 22% q/q, and pellets – increased by 2% q/q, up to 1.61 million tons. The results of steel undustry’s activities were affected by the limited production of electricity in Ukraine due to Russian shelling from mid-March 2024 and the high demand for imported high-value electricity.