By KYIV. Dec 16 (Interfax-Ukraine) – Russian sub-sanctioned companies continue to supply metal products to the EU countries, these loopholes need to be closed, Yuriy Ryzhenkov, CEO of the Metinvest mining and metallurgical group, has said.
"There is the eighth package of sanctions that was introduced by the EU against Russia in October and included a ban on the supply of steel products to the EU. But, unfortunately, there is a loophole that gives a two-year delay to many Russian manufacturers to import Russian semi-finished products to the EU," he said in an interview with the leading Italian publication Corriere della Sera, in which he spoke about the key issues of the company’s functioning during the war, sanctions against the aggressor, as well as the restoration of the Ukrainian economy after the end of the conflict.
According to Ryzhenkov, many EU countries still import steel from Russia. Thus, the largest importers of Russian steel are traditionally companies from Belgium and Italy. "I believe they will remain traditional importers. There is a subsidiary of a Russian steel producer in Belgium. I would be surprised if they did not use this loophole to import their semi-finished products," the CEO said.
He said that Metinvest is in favor of strengthening sanctions against Russian steel. "As by leaving this loophole, you are actually putting conscientious European manufacturers who do not want to sponsor aggression at a disadvantage. The EU is putting its players, who want to support Ukraine, at a disadvantage. Therefore, we believe that it would be better if this loophole were closed," the top manager said.
At the same time, he explained that European importers of semi-finished products, which they buy at significantly lower prices, have an advantage over other producers in the EU who refuse to buy from Russians. Thus, the latter are at a disadvantage, in particular Metinvest’s plants in Italy and the UK.
"This is an unfortunate situation we are in. Russia is unfairly taking market share from more prudent manufacturers such as Metinvest and other European manufacturers who refuse to buy from the Russians because of their unwillingness to sponsor the Russian economy. I hope this sanctions loophole will be closed in the next two packages," the CEO of the company said, expressing hope.
He recalled that Metinvest had suffered greatly from the war. The group experienced interruptions in its work in Ukraine mainly due to the destruction of infrastructure in Mariupol earlier this year. Operational control was lost over two steel plants – Azovstal and Illich Iron and Steel Works, which in 2021 together produced about 8.6 million tonnes of steel. Since then, they have been idle and, according to Ryzhenkov, are probably partially damaged or destroyed. This situation also affected the group’s enterprises in the UK and Italy, which relied on semi-finished products produced by Illich Iron and Steel Works.
In addition, the situation is affected by the blockade of Ukrainian seaports, which are of key importance for the company’s exports. The group is currently unable to use the maritime route to deliver its products to, for example, markets in Southeast Asia or the Middle East.
According to the top manager, they managed to maintain production at all the assets that remained under the control of the group, while enterprises actively support the Armed Forces of Ukraine in the war against the aggressor country Russia. Thus, within the framework of the military initiative of Rinat Akhmetov Steel Front, the army was provided with body armor, drones, helmets, cars and other military equipment.
However, Ryzhenkov said that some of the metal products were stolen as a result of the forcible seizure of factories in Mariupol.
"We had more than 230,000 tonnes of steel products ready to ship, and they were stolen by the Russians." The group is tracking and documenting all of these cases – part of the company’s legal case against the Russian Federation after a lawsuit was filed with the European Court of Human Rights in connection with the occupation and destruction of factories and theft of products. The group will sue them to the last penny for the damage they caused to the company," the CEO said.
Asked about Ukraine’s contribution to the EU, the CEO said that the metallurgical industry in Ukraine can be quickly transferred to the production of green steel.
"The European Union is still a fairly large importer of steel, and Ukraine can fill this gap with green, carbon-free steel. But we can also contribute to energy, food security and much more, but now investors are more focused on to survive this war," Ryzhenkov said.
