One week before Russia invaded Ukraine, the country's largest private employer and steelmaker outlined plans to modernize its Ukrainian facilities and continue construction of its new private technical university in the city of Mariupol.
But the war turned the mining and metallurgical company's plans upside down, driving it to become a critical source of defense materials and humanitarian aid in the besieged country instead. Mariupol, the location of nearly one-third of Metinvest Holding LLC's 97,000 employees, soon became one of the country's hardest-hit areas, and Metinvest executives had an up-close look at the devastation there. Ukrainian authorities said at least 1,000 civilians were taking cover in underground shelters at Metinvest's Azovstal steel plant as Russian troops dropped bombs on the facility, Reuters reported April 19.
"Seeing the city almost completely destroyed and its citizens constantly being shelled and forced to the edge of survival is heartbreaking, to say the least," Metinvest CEO Yuriy Ryzhenkov said in written comments provided to S&P Global Commodity Insights on April 14. "There is very little left of the city I once knew."
After Russia invaded Ukraine on Feb. 24, Metinvest suspended operations at several of its Ukrainian production facilities. It then shifted its focus to assisting the Armed Forces of Ukraine and territorial defense units throughout the country. The company has provided over 110 vehicles, more than 50,000 anti-tank obstacles known as hedgehogs and 20,000 studded chains for use against Russian vehicles, it said. Early in the conflict, Metinvest allocated €10 million of its own funds to buy 10,000 bulletproof vests, helmets and 24,000 medical tourniquets.
"Overall, it only took a few days to completely shift the focus of our Ukrainian facilities and plants, as we all have been working around the clock from day one of this war, just like most Ukrainians, I guess," Ryzhenkov said.
The company is majority-owned by Rinat Akhmetov, the wealthiest person in Ukraine. Akhmetov has said he would "spare no expense or efforts to help the country resist and rebuild once the war is over," according to Ryzhenkov.
Mariupol under fire
People who try to leave Mariupol do so at their own risk as the Russian army is disrupting travel along humanitarian corridors, Ryzhenkov said.
"Despite constant shelling and a horrific humanitarian catastrophe in the city, Mariupol remains a Ukrainian city," Ryzhenkov said April 14. "It has not surrendered to the demands of the Russians, and our defenders there are doing the impossible under unimaginable conditions.
Metinvest set up a hotline for those who have escaped the city so the company can help them. The hotline had received 14,000 calls as of April 14, Ryzhenkov said. The metals and mining company has offered accommodation, food and other provisions for displaced citizens and is working on expanding job opportunities at other sites.
The company had working bomb shelters at its Mariupol plants from 2014 when Russia supported military conflict in the Donetsk and Luhansk regions, Ryzhenkov said. The shelters hold about 4,000 people and are stocked with supplies of water, food and other necessities.
"To say that it has been a challenge would be an understatement," Ryzhenkov said. "Our highest priority and responsibility have always been the safety of our people and their families."
Steel still needed
More than one-third of Ukraine's metallurgy production capacity is no longer active due to the siege of Mariupol, Reuters reported April 15. The company is a major supplier of iron ore to Europe, and it told the outlet that it "will never operate under Russian occupation."
Metinvest BV, the parent company of the vertically integrated group of steel and mining companies, produced a significant portion of Ukraine's steel and iron ore in 2021, including 9.5 million tonnes of crude steel and 31.3 Mt of iron ore concentrate. Crude steel production in Ukraine totaled an estimated 21 Mt in 2021, while iron ore concentrate production reached 83 Mt, according to S&P Global Market Intelligence data.
Steel supply chains rattled
Metinvest is still trying to ship iron and steel to Europe, which is reeling from the loss of Ukrainian and Russian production; the two countries produced 4.3% of global iron ore exports in 2021 and were responsible for about 23.3% of the world's global pellet shipments in 2021. Iron ore exports from Ukraine are forecast to tumble 70% in 2022, according to Commodity Insights analysts.
Metinvest typically ships iron ore from Black Sea ports, but a Russian blockade is preventing access. The company hopes to ship via ports in Romania or elsewhere, Ryzhenkov said.
Metinvest's operations in Mariupol and Avdiivka remain in hot conservation mode and have reportedly sustained damage from the war, according to an April 11 company update. But steelmaker Zaporizhstal JSC, in which Metinvest has a 50% stake, has brought its assets out of hot conservation mode. Metinvest's metallurgical coke and refractory assets in Zaporizhia, Ukraine, have also been restarted.
"We will continue delivering on behalf of our people as well as investing in our business, despite any enemy threats," Ryzhenkov said. "After the war is over, we will definitely rebuild our cities and infrastructure to make Ukraine even more beautiful and prosperous than before.
Working in concert with the Rinat Akhmetov Foundation, Metinvest set up hubs at its Poland office to gather humanitarian aid and distribute it to Ukrainian centers for distribution.
Humanitarian checkpoints are now using steel from Metinvest to make stoves and ovens to heat and prepare food for Ukrainian citizens. They have also arranged the supply of steel plates for 80,000 bulletproof vests, provided free to the country's defense forces.
The company collected 2,200 tonnes of essential goods from partners in the EU, including 100,000 food kits distributed to Ukraine citizens and added to strategic stockpiles. More than double that figure has been dispatched and is awaiting collection and distribution, according to an April 14 statement
Metinvest has also shipped out over 3,000 tonnes of sand and gravel and 2,400 reinforced concrete blocks.
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