Non-refund of VAT to Ferrexpo may bring down Ukraine’s steel industry – Kalenkov

Steel sector may lose jobs, export revenues and investments due to fiscal restrictions

Ukrmetprom, an association of mining and metals companies, has expressed deep concern over the delay in the refund of export VAT to Ferrexpo. This situation not only jeopardizes the financial stability of one of the largest iron ore producers in Ukraine, but also poses risks to the entire industry and the country’s economy.

“In the face of a full-scale invasion and despite the losses incurred during the war, Ukraine’s mining and metals sector continues to operate and is one of the economic pillars of our country. The industry’s enterprises provide jobs to the population, taxes to the budget, and contribute to exchange rate stability by bringing foreign currency earnings into the country. I would also like to highlight the contribution of the mining and metals companies to Ukraine’s victory: they not only pay all the necessary taxes and duties but also act as major donors of aid for the needs of our army,” said Oleksandr Kalenkov, President of Ukrmetprom.

Ferrexpo owns Poltava, Yeristovo and Bilanovo GOKs and is a key player in the Ukrainian steel industry. The stability of its operations is critical for thousands of employees, logistics, the regional economy and foreign exchange earnings. The absence of VAT refunds has already led to a decline in production, exports and investment, which directly affects the country’s GDP.

“We have an external enemy and now more than ever we need to be united for the sake of victory and the future. Failure to refund Ferrexpo’s VAT leads to a decrease in the company’s production volumes, reduced shipments to our railways and ports, lower revenues from exports of Ukrainian products, curtailment of investments in our economy and a decrease in Ukraine’s GDP,” Kalenkov emphasized.

The President of Ukrmetprom emphasized the need for fiscal authorities to comply with the current legislation and ensure equal conditions for all enterprises. Strict adherence to VAT refund procedures is critical for Ukraine’s competitiveness in international markets, attracting investment and economic development.

As a reminder, in 2024, Ferrexpo produced 489.72 thousand tons of DR pellets, compared to no such products in 2023. Total pellet production in 2024 increased by 58% year-on-year – to 6.07 million tons.