Pinchuk pinches Akhmetov
The longstanding leadership of Rinat Akhmetov’s System Captial Management on Ukraine’s iron ore extraction market is at stake, according to KW.
The company’s main rival Interpipe of Dnipropetrovsk headed by oligarch Viktor Pinchuk may deprive Akhmetov of his status on the Ukranian steel market. For now the founder of EastOne Holding prefers to implement his plans behind the scenes by targeting local iron ore enrichment plants run by Akhmetov’s business partners. An article in the latest issue of KW sees if this confrontation may develop into an all-out brawl.
In the rivalry between Black Iron and the Smart-Holding the latter has the edge: just recently the Dnipropetrovsk Oblast Commercial Court and the Dnipropetrovsk Court of Appeals upheld the ruling of the Kryviy Rih City Council on the expansion of the territorial posessions of Pivdenniy OEP, thereby expropriating Shimanivske Steelwork’s production site.
Such court rulings play not so much into the hands of Vadym Novynsky as his senior partner in Metinvest Rinat Akhmetov, who has constantly been trying to monopolize the iron ore extraction market in Ukraine.
Even if the Shymanivske Steelworks loses its claim for the eponymous deposit, the Lozovatske, Mykolaivske, Horikhivske and Proletarske deposits will remain in Pinchuk’s portfolio. Given this, Pinchuk has a steady platform to compete with Akhmetov in the future. Of course, he prefers to look for financing to fulfill his iron ore fantasies abroad. The Canadian Black Iron may offer him certain assistance as the company already has experience in engaging so-called offtake partners – namely foreign companies that are willing to invest in projects on the security of future products.
It will be a totally different story in which there will be much less companies eager to invest money into such industrial plants in Kryviy Rih if SCM trumpets one unpleasant nuance for Pinchuk, namely the fact that practically all deposits owned by EastOne have complex structures and the distance between ore bodies is hundreds of meters, which is the main reason why each of them should be extensively explored as a separate mine, the article by Dmytro Ryasniy concludes.