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Metinvest and ISD declare humanitarian catastrophe in case of continuation of blockade or “nationalization” of enterprises in ORDO

Metinvest, the largest Ukrainian mining and metallurgical holding, and the Corporation “Industrial Union of Donbass” (ISD) strongly opposed to the blocking of the railway on the border demarcation in the area of the ATO, as well as possible “nationalization” of their companies from certain districts of Donetsk and Lugansk regions (ORDA).

As have informed Agency “Interfax-Ukraine” Metinvest and ISD on Thursday, in the case of stops enterprises, it would entail a humanitarian catastrophe.

In particular, in the group “Metinvest” note, which is temporarily not controlled by Ukraine territory there is a number of group companies, among them coal Association “Krasnodonugol” (Lugansk region.), Enakievo metallurgical plant (EMZ), Makeyevka steel plant (a branch of yenakiieve steel), “Komsomol Rudoupravlenie” and Khartsyzsk pipe plant (Khartsyzsk pipe, all – Donetsk region).

“Legally, they were re-registered in the cities controlled by Ukraine, Severodonetsk and Mariupol . This means that all of these companies in their activities are guided by the legislation of Ukraine, and obtain all necessary licenses in Ukraine and pay taxes, fees and other mandatory payments to the state budget of Ukraine, and also bring foreign currency into the country due to its export revenues,” – emphasized in the “Metinvest”.

It is stated that “DNR” and “LNR” is not recognized by any country in the world, with whom the group conducts trading activities.

“Nationalization” or re-registration of enterprises in the jurisdiction of the DPR/LPR will lead to a complete cessation of exports. In addition, they will not be able to continue his work without qualified management and personnel the group “Metinvest” has to cut. These actions will inevitably lead to stop the companies and their subsequent closure,” – noted in the “Metinvest”.

Also it is stated that only at designated enterprises to reduce will undergo almost 20 thousand people. This will inevitably be followed by layoffs of people and related industries – energy, transportation, engineering – as well as contractors that will lead to a social explosion.

“We believe such a scenario is unacceptable and we intend to continue to carry out all the activities of enterprises that are physically located on the uncontrolled territories, in the framework of Ukrainian legislation. All the above enterprises are inextricably linked with other mining and metallurgical complex (MMC), located on the territory controlled by Ukraine, – logistics, supply of raw materials, the overall production chain. So their stop will inevitably lead to significant problems in the MMC of Ukraine in General and the possibility of a number of other companies. In this case, after a full stop to re-start production is impossible, and it will be lost forever,” – said in the group.

It is also noted that the crisis may come much earlier than the relevant laws will be adopted in the unrecognized republics. So, in late January, a group of people claiming to be former soldiers of the Ukrainian volunteer battalions, blocked the movement of trains on several railway lines in the Luhansk region and announced the beginning of a trade embargo uncontrollable Ukraine territories. Thus, was blocked not only the supply of coking coal in the Ukrainian metallurgical enterprises, but also the supply of steam coal required for thermal power plants, States in “Metinvest”.

In turn, the Executive Director of the ISD Maxim Zavgorodniy told the Agency about its solidarity with the position of “Metinvest”, calling to remove the blocking of the goods, and also criticizing the actions ORDO on the “nationalization” of enterprises.

“The position of “Metinvest” we have the same,” he said.

At the same time M. Zavgorodniy said that the company “ISD” as “Metinvest”, registered in Ukraine, the companies employ Ukrainians get paid.

According to him, in ORDA stopped almost everything except MMC. M. Zavgorodniy recalled, Alchevsk iron & steel works is a modern enterprise. The cogeneration plant is operating in the secondary gas – blast furnace and coke – producing electricity, has no analogues in Ukraine.

“I have no words for this situation. Is a collapse. The company is now on hot conservation. There is the question of ongoing costs of sustaining capital and social support of the people is the responsibility of the shareholders”, – said the Executive Director of the ISD.

Turning to the issue of the so-called “nationalization” from the “DNR/LNR”, he said: “It is the position, say so clearly illegal. And there rights are violated and our owners, and Ukraine in General, and European financial institutions that participated in the process of a unique complex – credit and other programs. In addition, there are many institutional aspects, involving foreign specialists, as the products are exported worldwide and used in various industries. And if anyone something tries to nationalize or try to work there – it will be simply impossible! It will just become a series of buildings that will not be a whole complex and will not be able to work under any circumstances. Even hypothetically – without Ukrainian certification of products is unrealistic,” – said the Agency interlocutor.

M. Zavgorodniy also reminded that AMK and DMK are integrated with the European assets of the Corporation – ISD-Dunaferr and ISD-Huta Czestochowa, to enter the slabs, and the cessation of supply could harm European companies.

Metinvest is a vertically integrated mining group of companies managing assets in every link of the production chain from the extraction of iron ore and coal and coke production up to the release of semi-and end products of steel pipes and coils and also manufacture other products with high added value. The group consists of mining and metallurgical enterprises located in Ukraine, Europe and the United States, has a sales network covering all key global markets.

The main shareholders of Metinvest group are SCM (71,24%) and “Smart holding” (from 23.76%), partnering in company’s management.

OOO “Metinvest holding” – managing company of Metinvest group.

ISD was founded in 1995. Is an integrated holding company owning blocks of shares of enterprises of mining-metallurgical complex. The Corporation consists of Alchevsk and Dnipro steelworks, steel works ISD Dunaferr, and ISD-Huta Czestochowa.

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