ArcelorMittal Kryvyi Rih (AMKR), Ukrainian subsidiary of Luxembourg-headquartered steelmaker ArcelorMittal, has expressed concerns about the inflated requirement of mandatory electricity importation needed for companies to guarantee unlimited electricity supply from the Ukrainian government, and has called on the government to review the requirement. At the beginning of June, the Ukrainian government decided that the guarantee of unlimited electricity supply will apply only to those enterprises that import at least 80 percent of their electricity consumption.
According to the statement, taking into account the need to spend additional funds on imported electricity transportation, as well as customs and excise duties, the price of imported electricity for the company is more than two times higher than the price of electricity paid by its competitors in the industry in the countries of Western Europe. In such conditions, further production becomes significantly unprofitable for AMKR and hurts competitiveness, AMKR said, adding that it will be forced to significantly reduce production and lay off approximately 1,200 employees.
“Such decisions of the government require clear calculations and justifications, as well as the search for a balanced solution for the industry, and, as a result, for the economy of the country. We call on the government to review the decision made and reduce the obligation of the mandatory minimum volume of electricity import to the level of 50 percent,” Mauro Longobardo, general director of ArcelorMittal Kryvyi Rih, said.