An overview of the impact of the War in Ukraine on mining companies
Russian invasion of Ukraine became a problem for the most important players in the world’s steel industry. Two companies, ArcelorMittal and NipponSteel, which made several investments in the development of mines in Russia and Ukraine, are the big losers of this war. At the same time, the operating conditions for large groups such as Polymetal have become difficult and confusing. Of course, the war in Ukraine has affected several other mining companies that have concentrated and continuous activities in Russia.
Japan’s Nippon Steel, the third largest company in the world, which has suffered a high loss from this war due to the lack of supply of its necessary raw materials, is trying to supply its raw materials from Brazil and Australia. Before the start of the war, 14% of the raw materials needed by Nippon Steel Company were supplied by Russia and Ukraine. ArcelorMittal, which is the second largest company in the world in the steel industry, officially announced the termination of its activities at the Kryvyi Rih factory in Ukraine and announced that it will close the development of mines in Ukraine until further notice, which has 20,000 workers.
According to Bloomberg, the loss of this Indian company, which is the largest steel manufacturer in India and the second largest company in the world in this industry, as a result of this war, will reach several hundred million dollars. Of course, the Swiss company Ferrexpo also announced that it will continue its production in the large Palavani mine in the center of Ukraine despite the force majeure situation in sending its shipments to buyers.
The Russian-English polymetal group has also adopted a position similar to Ferrexpo and announced that they will continue their activities in the two countries of Russia and Kazakhstan. The available evidence shows that the imposed sanctions have not affected the activities of this company in Russia. Polymetal’s main concern is that with the imposition of extensive sanctions on this industry, it will not be possible to continue cooperation.
The officials of this company have announced that they are carefully monitoring the war situation. The further deterioration of war conditions in Ukraine can lead to a significant increase in global sanctions and intensifying pressure from the European Union, Great Britain, and the United States on Russia, which initiated the war.
polymetal Company, which is one of the 10 main players in the gold industry and one of the five important players in the silver mining industry, will suffer a large loss if the war in Ukraine continues. The statement of this industrial group is: the worsening of the war situation in Kyiv can significantly increase the possibility of imposing various sanctions from different countries and the whole of Europe.
This company has emphasized that the scope and impact of these potential new sanctions (and any potential reciprocal sanctions) are unknown, but may affect key Russian financial institutions as well as various mining companies operating in the country. Polymetal has announced in its statement that it does not think that the United Kingdom and the European Union are the targets of the smart sanctions of the United States of America.