Kryvyi Rih's Open Letter Won't Stop the Mothballing — but Its Ore Proposal Deserves Attention

The Kryvyi Rih city council has published an open letter from acting mayor Yuriy Vilkul to ArcelorMittal executive chairman Lakshmi Mittal, asking him to personally intervene against the reported plan to fully suspend operations at ArcelorMittal Kryvyi Rih (AMKR) and then mothball the site. Council members say they learned of the intention through the media — a detail that says as much about the state of company–community relations as about the decision itself.

There is little reason to expect the letter to change the outcome. A shutdown decision of this kind is made against cash burn, asset damage and an insurance/recovery calculus, not against a municipal appeal. What matters for the wider industry is the substance buried in the city's counter-proposal: a plan to keep the mining and beneficiation side running by moving ore to ArcelorMittal's European plants, even with steelmaking stopped.

What the city is actually asking for

The appeal rests on three arguments, of unequal strength:

• Employment. The council cites a fall from roughly 57,000 employees before privatisation to about 17,000 now, and warns of knock-on effects across Kryvyi Rih households and supporting industries.
• Industrial and environmental safety. Coke and metallurgical operations involve hazardous substances, while tailings storage facilities, dams and drainage systems need continuous monitoring and maintenance. Groundwater keeps flowing into the mines whether or not production continues.
• A partial-operations alternative. The city argues that partial steelmaking remains technically feasible with appropriate employee safety measures despite previous missile attacks, that domestic demand for construction and reconstruction steel persists, and that mining could continue by railing up to 300,000 t/month of iron ore concentrate to ArcelorMittal's European facilities — a practice the statement says has existed for two decades.

Why the steelmaking argument is weak — and the ore argument is not

The first two points are morally serious but commercially thin. A steel plant is not run at partial output to keep the lights on; blast furnaces, coke batteries and sinter strands have minimum economic loads, and restarting a cold plant is far more expensive than keeping it warm. The council's own framing — "partial steelmaking could technically continue" — concedes that the technical feasibility is not the binding constraint.

The ore proposal is a different proposition. At 300,000 t/month, the city is describing about 3.6 Mt/year of iron ore concentrate, roughly one-third of the plant's concentrate output in a normal year. Reported pre-war figures put concentrate production near 11 Mt and ore mining near 24.5 Mt, so this is a lifeline volume, not a capacity plan. But it is a lifeline with a purpose: it keeps the beneficiation plants, the rail loading infrastructure and a core of skilled staff in place, and — importantly for ArcelorMittal — it keeps a Ukrainian concentrate stream flowing to its European steel operations.

That last point is where the city's appeal and the company's interests may actually intersect. ArcelorMittal's European flat-rolled mills are buyers of DR-grade and blast-furnace-grade pellets and concentrate; a Ukrainian supply route that bypasses the Black Sea and runs on rail into the EU has strategic value that a mothballed steel shop does not.

The arithmetic of the decline is worth stating plainly. A fall from 57,000 to 17,000 is a loss of 40,000 jobs, or about 70% of the workforce, over roughly two decades since the 2005 privatisation. That averages out to under 2,000 a year, but the attrition has been lumpy: the 2008–09 crisis, the 2022 invasion and mobilisation, and — reportedly — the loss of EU sales after the CBAM transitional regime and a subsequent round of redundancies. Reported 2025 steel output of about 1.69 Mt compares with roughly 4.9 Mt in 2021, meaning the plant was already operating at about a third of pre-war capacity before the current shutdown plan.

The context the letter understates

The public record assembled around AMKR in 2026 suggests the shutdown is driven by more than battlefield damage. Reports earlier in the year pointed to sustained losses, parent-company support, high electricity and gas costs and disrupted rail logistics. September reports — including FT reporting widely summarised elsewhere — described ballistic-missile strikes disabling Ukraine's three major remaining steel plants, with a Metinvest executive quoted as saying the country no longer had a steel industry. ArcelorMittal reportedly put over US$700 million into sustaining the plant and expected a non-cash impairment of roughly US$1 billion. A subsequent announcement in October reportedly set out a cold shutdown followed by mothballing, with no restart until hostilities end.

If those reports are accurate, the decision is not a negotiating position that a municipal letter can reverse. It is an asset-preservation decision under war risk, with the added complication that — as the city correctly notes — a mothballed integrated works is not environmentally inert. Coke-oven batteries, tailings dams and mine dewatering are liabilities that persist after the last coil is rolled, and someone has to pay for them.

What to watch

Three things will determine whether the city's alternative survives contact with reality:

1. Whether ArcelorMittal engages on the ore rail route. A 3.6 Mt/year concentrate flow to EU plants is a modest but real commercial proposition. If the company adopts it, it signals a long-term Ukrainian mining presence even as steelmaking goes cold. If it does not, the mothballing is likely to be comprehensive.
2. Who carries the care-and-maintenance burden. The city's environmental argument is, in effect, a request that the parent fund custodianship of dams, tailings and dewatering at a site generating no revenue. That is a liability question as much as an industrial one, and it will be negotiated with the state, not the municipality.
3. The precedent for other Ukrainian assets. Metinvest's plants face the same war-risk and logistics constraints. A comprehensive AMKR mothball that preserves mining would validate a "mine yes, steel later" model for the sector; a full withdrawal would suggest the opposite.

The bottom line

The open letter is best read as a political document, not an industrial plan. Its steelmaking proposal is unlikely to move a board that has already written down roughly US$1 billion. But its mining proposal identifies the one part of AMKR's value chain that can still function without a blast furnace — and that is the part the market should track. If Ukrainian concentrate keeps moving west by rail while the steel shop goes cold, that tells us more about the future of Ukrainian iron ore than any appeal to Lakshmi Mittal ever will.

Note on sourcing: figures on employment, output, impairment and the reported shutdown timeline derive from the SteelOrbis report and secondary summaries of company and press reporting; they should be treated as reported estimates rather than audited data. The 300,000 t/month concentrate figure and the alternatives described are the city council's own proposals, as relayed by SteelOrbis.