General Consul of Federal Republic of Germany: We hope for equal approach to all investors in Ukraine as it was told by the President Zelenskiy

08/ 11/ 2019

Kryvyi Rih, November 5, 2019. I am aware that different companies from time to time face difficulties with prolongation of licenses and permits. But it is strange to hear that Security Service of Ukraine (SSU) can play a certain role, that it can interfere in and impact on solving of environmental issues, it is absolutely inacceptable in Germany, noted Mr. Stefan Keil, General Consul of Federal Republic of Germany in Donetsk with temporary location in Dnipro during the meeting with top managers of ArcelorMittal Kryvyi Rih. The challenges you are facing were already discussed at different levels at the German Government, German Embassy and Consulate General. In late September, the Ambassador of Germany in Ukraine Mrs. Anka Feldhusen addressed this topic during her large-scale visit to the east of Ukraine’ – told Mr. Stefan Keil. He reminded that Kryvyi Rih is not the only city in Ukraine that faces environmental problems, where metallurgical companies are located. But according to him, it is very important that “the attitude to foreign and internal investors should be equally unprejudiced and unbiased”. I have already visited Mariupol twice. It is city where two big metallurgical plants are located and dominating in regional economy. That is why the situation there is a bit more complicated than in Kryvyi Rih. But it seems to me that the plants in Mariupol are treated differently than ArcelorMittal Kryvyi Rih. At the recent investment forum in Mariupol, in his welcome speech the President Zelenskiy placed the emphasis on the fact that there should be equal approach to foreign and internal investors. Probably it is no coincidence that he told about that in the beginning of his speech. But we see that at the moment it probably is not like this, told General Counsel of the FRG at the meeting. At the same time, he noted that the President is native to Kryvyi Rih, closely aware of the situation, environmental activists also have a lot of questions to the plant. That is why Stefan Keil asked to tell in detail about the plans of the Company to improve environmental performance. Aleksandr Ivanov, Chief Operating Officer of ArcelorMittal Kryvyi Rih, Vladimir Teslyuk, Chief Operating Officer Mining as well as Liana Maksimenko, Director of Environment Protection Department of the company, answered the questions of the General Consul of the FRG in details. For instance, they communicated not only the amounts of the investments and percentage of emissions reduction, but also named the facilities, which had been already decommissioned. These are two old-fashioned coke-oven batteries, open-hearth furnace and blast furnace enabling the reduction in environmental footprint. Moreover, steelmaking facility THF-6 was switched to direct-flow mode – its emissions have been reduced by 60%. Also, 123 gas cleaning plants were built, half of basic oxygen furnaces was renovated (the project will be continued on three other furnaces). Blast furnaces No. 6 and No. 8 were modernized, two new modern coke-oven batteries were built as well as three continuous casting machines and other facilities. The company is particularly focused on changes in sintering process, which accounts for about 70 % of air emissions. We changed our initial plan and we decided to build a new pellet plant instead of the sinter plant. This will enable us to decommission two sinter plants instead of one and reduce the emissions by 54 % instead of 38 %. In other words, we went for an environmental project. For this purpose, a loan of €350 million was received from the European Bank for Reconstruction and Development, said Aleksandr Ivanov at the meeting. According to him, the reconstruction of the second sinter plant worth $170 million will be continued as well. Three out of six sinter strands have already been modernized, the fourth one is in progress. The whole project will be completed by the end of 2021. The company has invested $4.8 billion by taking over the plant and $4.4 billion in modernization of production facilities. Another $1.8 billion to be invested in the next five years, the Companys top manager emphasized. At the meeting, Mr. Stefan Keil reminded that ArcelorMittal is not only a major foreign investor in Ukraine, but it also represents the largest German investments in the country - through ArcelorMittal Duisburg, registered in Germany. Therefore, the FRG authorities will follow the situation of ArcelorMittal in Kryvyi Rih. I understand that you inherited a very complex unit with problems that have lasted since the Soviet times. And I understand that it is difficult to complete modernization process in a short period of time, it takes time, said the General Consul of FRG. At the same time, the company took a number of commitments, which shall be fulfilled sooner or later. Most importantly, you strive for improvement of the environmental situation’.

Kryvyi Rih, November 5, 2019. ‘I am aware that different companies from time to time face difficulties with prolongation of licenses and permits. But it is strange to hear that Security Service of Ukraine (SSU) can play a certain role, that it can interfere in and impact on solving of environmental issues, it is absolutely inacceptable in Germany,’ noted Mr. Stefan Keil, General Consul of Federal Republic of Germany in Donetsk with temporary location in Dnipro during the meeting with top managers of ArcelorMittal Kryvyi Rih.

‘The challenges you are facing were already discussed at different levels at the German Government, German Embassy and Consulate General. In late September, the Ambassador of Germany in Ukraine Mrs. Anka Feldhusen addressed this topic during her large-scale visit to the east of Ukraine’ – told Mr. Stefan Keil.

He reminded that Kryvyi Rih is not the only city in Ukraine that faces environmental problems, where metallurgical companies are located. But according to him, it is very important that “the attitude to foreign and internal investors should be equally unprejudiced and unbiased”.

‘I have already visited Mariupol twice. It is city where two big metallurgical plants are located and dominating in regional economy. That is why the situation there is a bit more complicated than in Kryvyi Rih. But it seems to me that the plants in Mariupol are treated differently than ArcelorMittal Kryvyi Rih. At the recent investment forum in Mariupol, in his welcome speech the President Zelenskiy placed the emphasis on the fact that there should be equal approach to foreign and internal investors. Probably it is no coincidence that he told about that in the beginning of his speech. But we see that at the moment it probably is not like this,’ told General Counsel of the FRG at the meeting.

At the same time, he noted that the President is native to Kryvyi Rih, closely aware of the situation, environmental activists also have a lot of questions to the plant. That is why Stefan Keil asked to tell in detail about the plans of the Company to improve environmental performance.

Aleksandr Ivanov, Chief Operating Officer of ArcelorMittal Kryvyi Rih, Vladimir Teslyuk, Chief Operating Officer Mining as well as Liana Maksimenko, Director of Environment Protection Department of the company, answered the questions of the General Consul of the FRG in details.

For instance, they communicated not only the amounts of the investments and percentage of emissions reduction, but also named the facilities, which had been already decommissioned. These are two old-fashioned coke-oven batteries, open-hearth furnace and blast furnace enabling the reduction in environmental footprint. Moreover, steelmaking facility THF-6 was switched to direct-flow mode – its emissions have been reduced by 60%. Also, 123 gas cleaning plants were built, half of basic oxygen furnaces was renovated (the project will be continued on three other furnaces). Blast furnaces No. 6 and No. 8 were modernized, two new modern coke-oven batteries were built as well as three continuous casting machines and other facilities.

The company is particularly focused on changes in sintering process, which accounts for about 70 % of air emissions. ‘We changed our initial plan and we decided to build a new pellet plant instead of the sinter plant. This will enable us to decommission two sinter plants instead of one and reduce the emissions by 54 % instead of 38 %. In other words, we went for an environmental project. For this purpose, a loan of €350 million was received from the European Bank for Reconstruction and Development,’ said Aleksandr Ivanov at the meeting. According to him, the reconstruction of the second sinter plant worth $170 million will be continued as well. Three out of six sinter strands have already been modernized, the fourth one is in progress. The whole project will be completed by the end of 2021.

‘The company has invested $4.8 billion by taking over the plant and $4.4 billion in modernization of production facilities. Another $1.8 billion to be invested in the next five years,’ the Company’s top manager emphasized.

At the meeting, Mr. Stefan Keil reminded that ArcelorMittal is not only a major foreign investor in Ukraine, but it also represents the largest German investments in the country – through ArcelorMittal Duisburg, registered in Germany. Therefore, the FRG authorities will follow the situation of ArcelorMittal in Kryvyi Rih.

‘I understand that you inherited a very complex unit with problems that have lasted since the Soviet times. And I understand that it is difficult to complete modernization process in a short period of time, it takes time,’ said the General Consul of FRG. ‘At the same time, the company took a number of commitments, which shall be fulfilled sooner or later. Most importantly, you strive for improvement of the environmental situation’.