ArcelorMittal Kryvyi Rih to end 2024 with losses due to tariffs, logistics, hopes for break-even in 2025 – CEO

ArcelorMittal Kryvyi Rih (AMKR), the mining and metallurgical complex in Ukraine's Dnipropetrovsk region, expects to close 2024 with losses due to high tariffs, logistical costs, and unfavorable market conditions. However, it aims to achieve break-even in 2025, according to CEO Mauro Longobardo in an interview with Interfax-Ukraine.

"The approximate forecast is around $100 million in cash losses, give or take. My goal at the beginning of the year was to achieve a cash-neutral position, avoiding the need for financial injections from the group, but this is not happening. This also includes investments we must make: an annual capex of $150 million is necessary for the company's survival," Longobardo said.

Before the war, the 2022 Capex was expected to be $500-550 million. Although the first year of the war saw minimal investments, maintaining 50% steel production and up to 75% of possible mining output now requires $150 million annually.

Strategic investments include constructing the Map III tailings storage facility for mining waste. Failure to complete it would halt ore extraction. "This $150 million is the minimum," the CEO said.

Extraordinary events have also compounded losses. In June 2024, a blackout caused a fire at Coke Battery No. 5, rendering it inoperable. Restoring it has been complex, resulting in additional costs – several million dollars monthly for coke purchases and $10-15 million for repairs.

These challenges prevented achieving a break-even position. Longobardo expressed gratitude for the group's support during this period but underscored that rising tariffs make self-sufficiency difficult. Electricity costs in 2024 accounted for 70% of total expenses, alongside burdensome logistics tariffs from Ukrzaliznytsia.

"Tariffs are killing us," Longobardo stated, adding that the goal remains to reach break-even in 2025.

ArcelorMittal Kryvyi Rih is Ukraine's largest producer of long steel products, including rebar and wire rod. The global group ArcelorMittal owns the facility, along with several smaller enterprises in Ukraine, such as ArcelorMittal Beryslav.