Solway Investment Group, an international investment group that owns Pobuzh Ferronickel Combine LLC (PFC, Kirovograd Region), intends to apply to courts for compensation for damages caused by Russia’s invasion of Ukraine.
According to the company’s information sent to Interfax-Ukraine agency on Wednesday, Ukrainian businessmen support the Ukrainian government’s initiative to protect business and create an international register of losses, fixation and evaluation of damages as a result of Russian aggression and carry out independent expert evaluation of losses, including loss of profit.
It is specified that last week lawyers of a number of enterprises took part in consultations with forensic experts for fixation and evaluation of damages – both direct and indirect, including loss of profit, caused to enterprises as a result of the russian aggression.
The event was held at the initiative of the Ukrainian Association of Ferroalloys Producers (UKRFA) and other electrometallurgical products for association member enterprises.
Earlier UKRFA representatives participated in the events dedicated to different aspects of assets protection. In December last year the Ministry of Justice of Ukraine registered the joint order of the Ministry of Economy of Ukraine and the State Property Fund of Ukraine “On approval of the methodology of determination of damage and loss volume, caused to enterprises, institutions and organizations of all forms of ownership in the result of destruction and damage to their property in connection with armed aggression of the Russian Federation, and also loss of profit from not
According to Serhiy Kudryavtsev, executive director of UkrFA, who is quoted in the press release, the said methodology will be mandatory for use in the assessment of damage caused to victims of armed aggression, as well as for forensic examination related to the assessment of damage. Official publication of the order, after which it will come into force, is expected.
“To date, many large businesses are already active in fixing and assessing losses, which requires the involvement of forensic experts, whose findings will be used by businesses to justify claims for recovery of losses at the expense of Russian assets in the relevant courts,” the press release states.
PFC plans to apply to judicial experts in order to conduct an appropriate study and obtain a conclusion, because because of the Russian aggression incurred real damage, the metallurgical production, on which the welfare and socio-economic situation of the Pobuzhsky territorial community depends, is terminated.
“Thus, as a result of Russian attacks on the power system of Ukraine, since November 1 of this year, PFC was forced to stop work, when both the electric furnace for production of ferronickel and part of the main metallurgical equipment were shut down. Moreover, the township of Pobuzhskoye was also blacked out, and the plant, which is the township’s backbone enterprise, had to miss out on utilities,” PFC general director Denis Shevchenko was quoted by the press service as saying.
According to him, the preliminary assessment of the damage is now about $12 million. According to the Head of the Frontier Committee, in the conditions of receiving reparations from the aggressor not only the direct losses caused to the property complex should be taken into account, but also compensation of the expenses that arose as a result of the disruption of the normal operation of transport in the country should be envisaged. He believes that the involvement of international institutions in the collection of damages from the aggressive actions of the occupiers in favor of Ukrainian business will contribute to the early recovery of Ukraine.
At the same time, the general director noted that the amount announced was only a preliminary estimate, because the calculation of losses should also take into account the fact that after the start of the Russian invasion, which caused the disruption of logistics and led to the inability to obtain the necessary amount of raw materials, the plant was forced to shut down one electric furnace.
“Before the Russian missile attack on the substation, we were operating at a part load – about 40% of the main load. After the bombing of the substation, the combine was left without power supply, which caused the furnace and its support systems to stop. We took a number of measures to prevent the accident, because the furnace was loaded with liquid metal and slag with a total weight of about 1500 tons,” explained Denis Shevchenko.
Today, PFC does not process the ore into marketable ferronickel.
In his turn, Rustam Dzhamgurov, PFC Deputy Director General for Legal Affairs, stressed that involvement of judicial experts, including international ones, is a prerequisite for preparing a lawsuit in court. And the creation of an appropriate register will allow an objective assessment of the amount of losses in order to further recover them from the assets and reparations from the aggressor state.
“Obtaining an expert opinion on the damage caused by the Russian aggression will enable us to sue for damages. It should be taken into account that an enterprise incurs losses every day, so it is advisable to cover the maximum period to accrue the amount of losses and file a lawsuit in court. We are also waiting for the definition of a clear mechanism to recover the damage caused to Ukrainian business at the expense of the assets of the aggressor state. Without this, any suits in Ukrainian and/or international courts are problematic and the decisions of these courts may not be implemented”, stated the lawyer.
Pobuzhsky Ferronickel Combine is the only enterprise in Ukraine, which produces ferronickel on an industrial scale.
In 2003, after a long downtime, the international company Solway Investment Group bought the assets of the enterprise and restarted it a year later. The Pobuzh ferronickel plant was reorganized into Pobuzh Ferronickel Combine with resumption of ferronickel production as well. The main raw material base for ferronickel production is imported ore.
At present PFK is fully integrated into the production process of Solway Investment Group. The total amount of the group’s investment in the combine is more than $130 million.
At the beginning of November 2022, PFC announced a forced suspension of production due to Russian shelling of the energy infrastructure.
Solway, an international investment group, started its operations in 2002. It is a private company running a diversified business in the mining and metallurgical industries. Key companies of the group are registered in Switzerland, Luxembourg, Estonia and Malta. 100% of its share capital is owned by EU citizens. Solway’s main production assets are located in Northern Macedonia, Guatemala, Indonesia, Argentina and Ukraine.
