Metallurgists turned to Zelensky because of the biggest crisis in the industry

Without state aid, Ukraine would lose its mining and metallurgical complex, which provides 33% of exports, 10% of GDP and half a million jobs.

Ukrainian metallurgists have asked President Volodymyr Zelensky for help because of the biggest crisis in the industry’s history. This was stated in an open letter to OP Ukrmetallurgprom.

“Today, the mining and metallurgical complex is experiencing the most difficult situation in the history of Ukraine’s independence. This is due to high logistics costs and the rapid growth of railway transport tariffs in Ukraine (+141% for ore/coal/coke and + 70% for ferrous metals over the past year), making Ukrainian products uncompetitive on the international market. Meanwhile, prices for MMC products in the world have fallen by a third and further decrease – which brings the Ukrainian MMC to the deepest crisis during the independence of Ukraine,” the letter said.

In the current situation, MMC businesses are running at a loss and only to save jobs. Thus, the workload of metallurgical plants was only 15% of the pre-war level, and mining and processing plants – by 25%.

“The MMC industry accounts for about 10% of Ukraine’s GDP, 33% of Ukraine’s exports and a major source of foreign exchange earnings – more than $22 billion in 2021. More than 130,000 people work in the enterprises of MMC, and about 530,000 jobs in related industries Thus, MMC enterprises and industries related to the complex provide 9.4% of the wage fund in Ukraine,” said Ukrmetallurgprom.

The association reminded: MMC that last year the industry paid UAH 95 billion in taxes.

MMC also provides 38% of Ukrzaliznytsia’s cargo transport and 37% of Ukrainian ports’ transshipment and consumes 19% of Ukraine’s electricity.

In war conditions and without state aid, Ukraine may completely lose its industry, warns Ukrmetallurgprom.

To preserve the industry, metallurgists proposed the establishment of Ukrzaliznytsia special tariffs for the transportation of raw materials and finished products (-70% from the current level), a reduction in the cost of electricity for MMC business, as well as temporarily. the elimination of rent for iron ore raw materials and, in the future, a reduction in rent for iron ores to account for the reduction from the Chinese index (Platts 62% Fe) logistics in China.

Other incentives with which the state can support the industry: the elimination of environmental taxes (CO – forever, because there is no such tax in EU countries; for CO2 emissions, other environmental emissions , water, waste generation and storage – for the period of war +6 months), the establishment of 0% import duties on inventory items not produced in Ukraine, as well as the replacement of payroll taxes and fees (personal income tax, ERU) with a single social tax of 10%.

It is also necessary to include Ukrainian metal products and iron ore products in the program for exporting goods from Ukrainian ports in order to sell accumulated balances in warehouses and reload Ukrainian enterprises MMC.

In addition, it is proposed to allow MMC businesses to enjoy the benefits of industrial parks with the provision of all available benefits. “It will be possible to maintain the production potential of the mining and metallurgical complex, to continue production in the near future at at least 50% of the pre-war level, and to maintain many thousands of collective workers,” end of Ukrmetallurgprom.

It should be noted that due to the crisis, ArcelorMittal Kryvyi Rih suspended the work of its mining and processing plant for three months and reduced the salaries of employees. Also, the mining and metallurgical complex of the Metinvest group was completely or partially stopped. Thus, there is almost no working MMC left in Ukraine, and production has fallen by 75-85%.

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