Ukraine’s major ferronickel producer Pobuzhsky Ferronickel Plant has been forced to halt operations after its energy supply system was dramatically affected by damages to the local power grid caused by Russian airstrikes.
November 1, 2022. Pobuzhkoe, Ukraine. As of November 01, 2022, the ferronickel producer Pobuzhsky Ferronickel Plant will halt production to prevent long-term economic losses because of the energy shortage. The decision came after Russia’s air attacks on the neighboring energy facility caused power outages that affected the metallurgical process and stopped water intake on October 22, 2022.
After the shutdown of the furnaces due to the interrupted electricity supply, PFP immediately took all the necessary precautions to prevent possible negative impact on human health or the environment. The plant continues running in a crisis mode that secures its further operations and intends to resume production as soon as the situation improves.
All personnel will retain their jobs for the period of suspension. The workforce involved in maintaining critical infrastructure facilities and protection of the plant will be paid based on hours worked. In accordance with Article 113 of the Labor Code of Ukraine, employees who are not involved in the protection or emergency maintenance of the equipment will be paid at least a two-thirds reduction of the established tariff rate or salary.
During the period of halted operations, PFP will continue fulfilling its social obligations to the community including sanitation maintenance, water, gas, and the supply of heat.
Since the start of Russia’s invasion in Ukraine PFP has been operating at a loss due to high energy costs, logistical obstacles, and a lack of raw materials and was subsidized by its Swiss investor Solway Investment Group. Taking into account the forced decline in production by more than half for 9 months of this year, the total volume of processed ore amounted to 643 thousand tons (62,8% compared to the results from 9 months in 2021), which corresponds to 42,3 thousand tons of ferronickel from ore raw materials (77,5% from 9 months in 2021) or 7,4 thousand tons of nickel (63,5% from up to 9 months in 2021).
During the specified reporting period, the plant paid taxes to the budget of Ukraine in the amount of 3,7 million USD (7,9% more than in 9 months in 2021). Of these, 1,8 million USD – single social contribution (8,6% higher compared to 9 months in 2021) and 1,4 million USD – payroll taxes (by 9,1% more than in 9 months in 2021).
Despite the decline in production capacity, wages, and social benefits remained the same. In addition, with the participation of the parent company Solway, the plant’s employees compiled medical first-aid kits for the military according to NATO standards and the Ministry of Health of Ukraine and established the process of purchasing and delivering the necessary medical and sanitary equipment from abroad. Currently, the financial assistance from PFP and Solway Investment Group to compile this medical equipment for the Armed Forces of Ukraine amounted to about 160 thousand USD.
”In these troubled days we will stay with our communities and support the people of Ukraine in their fight for victory,” says Denis Shevchenko, general director of PFP