Steel industry in Kryvyi Rih, as well as plants in Nikopol, Pokrov and Marhanets, will be affected by the lack of water

In the early morning of June 6, 2023, Russian troops blew up the dam of the Kakhovka Hydroelectric Power Plant (HPP), causing a large-scale environmental disaster. At the moment, 14 cubic kilometers have already leaked from the reservoir of water, or about 70% of its volume. In addition to the humanitarian and ecological disaster, the collapse of the dam poses problems for the water supply of numerous industrial enterprises. Currently, the biggest threat hangs over the iron and steel facilities in Kryvyi Rih. The city received about 70% of its water through the Dnipro-Kryvyi Rih canal and the Southern reservoir which is fed from the Kakhovskiy reservoir

Most of the enterprises of the Ukrainian mining and steel complex are concentrated in Kryvyi Rih: ArcelorMittal Kryvyi Rih, Kryvyi Rih Iron Ore Plant, Northern, Central, Ingulets, and Southern Minings, mining company Rudomine and Sukha Balka mine.

The situation at enterprises

Problems with water supply directly affected many enterprises of the mining and steel complex, which required them to make often difficult decisions. Thus, ArcelorMittal Kryvyi Rih suspended the production of crude steel and rolled steel products to reduce water consumption in critical conditions. Only blast furnace and coke-chemical production, as well as Mining, will remain in operation.

At the same time, Metinvest’s enterprises are working normally, the situation there is under control.

«Currently, the situation at the Kryvyi Rih enterprises of the group, Zaporizhstal and Kametstal, is under control. Technological process is continuing, there are issues with household needs, but they are resolved in working order. All enterprises are working regularly, the group is monitoring the dynamics of the water supply,»  emphasizes Metinvest.

There are also possible problems in enterprises located in cities whose water supply depended on the Kakhovskiy reservoir, in particular in Nikopol, Marganka. On the one hand, the enterprises located there report about stable operation of production activities.

«The incident did not affect the production activity in any way. Our plant is located upstream from the dam, and the water level in the Dnipro River in the Nikopol area is decreasing. All this ensures the absolute safety of equipment operation, as well as zero impact on the stable provision of utility services at our plant,» the Centravis Pipe Plant notes.

Nikopol seamless pipe plant Niko Tube of Interpipe is working regularly, although there they note the risks associated with the current situation.

At the same time, the Nikopol ferroalloy plant due to reducing water consumption is reducing production volumes. The company receives water from the Kakhovskiy Reservoir, and due to the destruction of the dam, it is forced to reduce water intake.

According to Sergiy Kudryavtsev, executive director of the Ukrainian Association of Ferroalloy Producers, the situation with the water supply of Marganetskyi and Pokrovskyi Minings is catastrophic.

«There is no water, it has gone from the wells. Everyone who can is now engaged in providing drinking water to the population of the cities of Nikopol, Pokrov and Marhanets,» emphasizes Sergiy Kudryavtsev.

Consequences for the industry

The explosion of the Kakhovska HPP dam and subsequent problems with water supply will definitely affect the production results of steel enterprises. Mining enterprises that are less dependent on water supply are in a more advantageous situation.

«ArcelorMittal has already announced the suspension of steel smelting and the production of rolled products. The authorities of Kryvyi Rih demand maximum water saving. The impact of the water shortage will be most felt on Kryvyi Rih and, at least, on other enterprises of Dnipropetrovsk and Zaporizhzhia regions. The negative impact on steel industry will continue, as, unfortunately, this problem cannot be solved quickly. So far, the easiest solution seems to be building up the dam of the blown-up hydroelectric power plant. I think that businesses will look for and implement temporary solutions to improve water supply (water storage, water reuse), but it will take time and investment,» says Oleksandr Kalenkov, president of the enterprises association Ukrmetalurgprom.

In particular, the company Rudomine created own technological reservoir to provide production processes with water, which is used for dust suppression.

«In connection with the explosion of the Kakhovska HPP dam, there was an urgent need to reduce water consumption for both enterprises and city residents. The own lake that is filled exclusively with mine water, allows for the rational use of resources and the implementation of environmental measures for dust suppression,» notes Serhiy Henkulenko, chief engineer of Rudomine.

In general, according to the estimates of Ukrmetallurgprom, due to the situation with water supply, a decrease in production of steel for 90–100 thousand tons is expected in June. For comparison: in April, ArcelorMittal produced 86.2 thousand tons of steel and produced 78.5 thousand tons of rolled products. For the longer term, it is still difficult to predict the impact of water supply problems on steel production.