Due to the blockade of Ukrainian ports for metal exports and logistical problems, the MMC industry is operating at 15-20% of its capacity.
Nine Ukrainian iron ore plants appealed to President Volodymyr Zelensky and Prime Minister Denys Shmygal to help unblock metal exports through ports, Obozrevatel wrote on Tuesday, September 13.
It is expected that this will allow businesses to resume production and will provide the budget with at least UAH 5 billion in tax revenue, as well as $600 million in foreign exchange earnings, which will help stabilize the Hryvnia exchange rate.
Industrialists remind that mining and metallurgical enterprises are in the worst crisis in the history of Ukraine.
“The main reasons are the restrictions on the sale of iron ore products through the blockade of Ukrainian seaports and insufficient throughput at the western border crossings. Therefore, the production of iron in Ukraine fell by 85%, and the Ukrainian metal is becoming uncompetitive in the world market,” the letter said.
This is due to a 4-6 times increase in logistics costs due to the rapid indexation of the railway tariff in Ukraine (since the middle of 21, the tariff for ore has increased by 141%), and due to additional costs for the transportation of products to EU ports.
At the same time, prices for iron ore products dropped by a third.
Due to the current situation, some MMCs are forced to operate at a loss, and some have stopped altogether.
Before the war, MMC enterprises accounted for 33% of Ukraine’s total exports ($22 billion in 2021) and generated at least 10% of Ukraine’s GDP. More than 530,000 people are employed directly and in related industries in MMC enterprises of Ukraine, and tax revenues from industrial enterprises alone in 2021 will reach approximately UAH 95 billion.
“Increasing the load of mining and processing and metallurgical plants of Ukraine to the pre-war level is possible only by continuing access for the products of MMC enterprises to distant sales markets, which will be possible only after the unblocking of Ukrainian ports for iron ore products and cargoes of the metallurgical industry (metal, coal)”, – stated in the letter.
“It will also save hundreds of thousands of jobs in Ukraine, and ensure the receipt of billions of hryvnias of taxes and payments to budgets and pension funds: 1.6 billion hryvnias per month directly from the Mining and Processing Plant; 2.4 billion hryvnias per month – a cumulative effect (metallurgical and coke-chemical production, related industries, consumer taxes of employees). It will also help to avoid additional unemployment payments in the amount of 1.5 billion hryvnias per month,” the industry calculated.
Earlier, the head of Ukrmetallurgprom called on the authorities to develop a program of state support and incentives for metallurgists.
News from Correspondent.net on Telegram. Subscribe to our channel Athletistic
Source: korrespondent
I am Dylan Hudson, a dedicated and experienced journalist in the news industry. I have been working for Buna Times, as an author since 2018. My expertise lies in covering sports sections of the website and providing readers with reliable information on current sporting events.