ArcelorMittal Kryvyi Rih, a prominent steel producer in Ukraine, is grappling with significant energy challenges as it strives to maintain operations amid the country's ongoing power shortages. Mauro Longobardo, the CEO of ArcelorMittal Kryvyi Rih, recently discussed these issues in an interview with Forbes, highlighting the company's struggle to secure affordable electricity to sustain its main equipment.
Since the onset of the full-scale war, ArcelorMittal Kryvyi Rih has managed to reduce its electricity consumption from 450 megawatts to 250 MW. Despite this substantial reduction, the company is compelled to import electricity at high costs to meet its operational needs. Longobardo forecasts a potential electricity shortfall of 2,500 to 4,500 MW in Ukraine's power system during the winter, depending on weather conditions. To mitigate this, the company plans to shut down one of its two operational blast furnaces starting in November, further reducing consumption.
Currently, ArcelorMittal Kryvyi Rih does not have plans to invest in self-sufficiency for its electricity needs, as the scale required is too large for internal generation. Before the Russian invasion, the company had considered acquiring a wind farm to transition to green electricity. Although this plan was put on hold, it remains a strategic priority. The company is actively seeking partnerships with energy companies to explore the possibility of building a wind farm or solar power plant near Kryvyi Rih under a long-term contract.
In addition to addressing immediate energy concerns, ArcelorMittal Kryvyi Rih is also planning for the future. The company is evaluating its electricity requirements in light of its intention to introduce electric arc furnaces for low-carbon steel production aimed at the European Union market. Ukraine's integration into the EU necessitates adherence to European standards, prompting the company to revise its strategy to prioritize the EU market, which was not a primary focus before the war.
ArcelorMittal Kryvyi Rih had initially planned a $2 billion reconstruction project for green steel production between 2022 and 2027. This ambitious plan, agreed upon with the group's management, is set to continue post-war with some adjustments. The project underscores the company's commitment to sustainability and its strategic shift towards environmentally friendly steel production.
