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ArcelorMittal closes Ukraine unit amid Russian and green laws

ArcelorMittal Kryvyi Rih is Ukraine's biggest steelmaker. It announced on Monday that it will close one production unit?in the 2nd quarter. The company cited EU environmental policies and high local power prices due to Russian attacks on energy infrastructure.

The plant in Ukraine's south-east, approximately 70 km from the frontline, will close its blooming mill. This mill produces?billets to be used by the small-gauge mills and wire mills of the enterprise.

The company stated that the introduction of the Carbon Border adjustment Mechanism by the European Union on?January 1, effectively closed the market for a significant part of Ukrainian metallurgical goods.

CBAM is the EU's tool for putting a "fair price" on carbon emissions during the production and importation of goods that are high in carbon.

ArcelorMittal Kryvyi Rih stated that the high cost of energy in Ukraine is a significant factor which has impacted the economic viability of the?unit. Russia has intensified and expanded its attacks against Ukraine's energy sector, causing widespread blackouts and constant restrictions to?electricity supply for industry.

The government encouraged companies to import electricity that is more expensive from the EU, which increased production costs and made exports less competitive. Ferrexpo, an important European supplier of iron ore pellets for steel production said earlier this month that it had stopped mining operations in Ukraine, and also furloughed a part of its staff, all because of electricity supply disruptions.

(source: Reuters)