Rebuilding Ukraine steel capacity hinges on security guarantees – CEO of Metinvest
Metinvest, Ukraine's mining and metallurgical group, considers U.S. and European security guarantees essential for restoring war-damaged metallurgical facilities, CEO Yuriy Ryzhenkov told Reuters in an interview.
According to Ryzhenkov, the company plans to maintain production levels close to those of 2024 while continuing projects aimed at enhancing energy independence. However, more extensive plans, such as repairing certain blast furnaces, will have to wait.
"We need to see what sort of conditions will be agreed to for a ceasefire or peace deal, and what sort of guarantees will be provided so that business can start investing again. Nobody knows what's going to be on the table at the end. And more importantly, we still don't understand what will be the guarantees that it (the war) won't restart," Ryzhenkov stated.
Despite Metinvest operating one of Ukraine's largest coal mines, the group is not involved in the country's rare earth elements agreement. The CEO emphasized that American firms would also require security guarantees before making investments.
"We were investing billions in Mariupol and were prepared to invest even more. But everything was destroyed within a few months. None of the agreements were obeyed," he said.
Regarding production, Ryzhenkov expressed hope that output would remain at approximately 2024 levels, with 2.1 million tonnes of steel and 1.82 million tonnes of pig iron produced that year.
"We will try to have an improvement on the steel production, iron ore production. But that improvement is going to be within like 3-5% improvement done last year. We don't expect anything more until the peace is restored," he explained.
At the same time, Metinvest continues investing in solar panels and gas-powered electricity generation to strengthen its energy independence. Ryzhenkov added that the company's green steel production project in Italy is expected to take another step forward in the coming weeks. Additionally, the group is exploring several small M&A opportunities in Central and Eastern Europe.
Metinvest also hopes to avoid debt restructuring: "At the moment, we don't have any significant immediate debt repayments coming up, so we don't really feel we need one. Obviously, it will depend how the situation will unfold in the next few months," the top executive concluded.
Metinvest is a vertically integrated group of mining and metallurgical enterprises. The company's operations are mainly concentrated in Donetsk, Luhansk, Zaporizhia, and Dnipropetrovsk regions. Its primary shareholders are the SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage the company.