ArcelorMittal Krivoy Rog Mining and Metallurgical Combine PJSC (AMKR, Dnepropetrovsk region) has announced the forced termination of production activities of its subsidiary Foundry-Mechanical Plant LLC (LMZ).
According to the company’s press release on Friday, the decision to cease production activities of LMZ, which is an auxiliary division of AMKR’s main production facility, will take effect three months from the date of the announcement.
AMKR notes that the decision is dictated by the current economic and market circumstances in which the company is operating in Ukraine amid a full-scale war. AMKR. A key reason for the move is the high cost of electricity in Ukraine. Constant attacks on the energy infrastructure have led to electricity shortages and the need to import electricity at even higher prices, which has led to a significant increase in production costs and a drop in production. For example, due to the shortage of e/e in January 2026 compared to November 2025 figures, there was a 30% drop in pig iron production, a 40% drop in steel production and a drop in rolled steel production by up to 60%.
“Compared to 2024, when we asked the Ukrainian government to urgently develop measures to curb the growth of electricity prices and support producers in the mining and metallurgical industries, the price of electricity rose from $120 per MWh (in Q2 2024 with delivery without VAT) to $230 in February 2026, reaching up to $370 per MWh during peak hours,” the press release states.
An additional negative factor was the decision of the European Commission to introduce CBAM (cross-border carbon adjustment mechanism) from January 1, 2026 without any exemptions and transition period for Ukrainian producers. This resulted in the loss of the European market for a significant part of Ukrainian steel producers and critically affected their production volumes and utilization of certain divisions and capacities.
“It is worth noting that AMKR made significant efforts to reorient sales to the EU market after the outbreak of a full-scale war. However, the implementation of CBAM without taking into account the realities of the war in Ukraine thwarted these efforts,” the press release explains.
The company notes that the decision to close LMZ will result in the reduction of 1.7 thousand jobs, and together with the closure of the blooming shop and related production processes, the number of job cuts will exceed 2,400. At the same time, LMZ employees will be offered jobs at AMKR with the possibility of retraining at the employer’s expense.
Foundry-Mechanical Plant LLC (LMZ) is one of the largest machine-building enterprises in Ukraine. The enterprise is a powerful machine-building and repair-mechanical complex, which includes a number of machine-building chains and such production branches as foundry, forging and pressing, thermal, welding and surfacing production, mechanical processing, metalworking and assembly, production of rubber and technical products, repair of mechanical products and others.
