Kryvyi Rih to cut budget expenditures due to shutdown of metallurgical enterprises

Kryvyi Rih will cut part of its budget expenditures this year due to a sharp drop in tax revenues from mining and metallurgical enterprises. The city plans to suspend a number of projects while maintaining financing for critical systems.

This was stated by the head of the Kryvyi Rih Defense Council, Oleksandr Vilkul, in an address to city residents. According to him, the situation is related to the effective shutdown of a significant part of the industry that forms the basis of Kryvyi Rih's economy.

Currently, ArcelorMittal Kryvyi Rih, the Inhulets and Pivdennyi mining and processing plants, and the Kryvyi Rih Iron Ore Plant are not operating. Other large enterprises, according to Vilkul, are working at maximum of about a quarter of pre-war volumes. At the same time, the work of contractor companies that service large industrial sites is shrinking.

Among the main reasons, Vilkul cited Russian strikes and logistics problems, in particular the inability to normally ship products through seaports.

The decline in production directly hits the community's revenues - tax revenues from enterprises and employee wages are shrinking. Because of this, the city plans to sequester the budget in 2026 and postpone some planned projects.

At the same time, the authorities intend to maintain funding for the city's basic functions - the operation of schools, kindergartens and hospitals, water and heat supply, as well as key social programs. According to Vilkul, the forecast for the city budget for 2027 also remains extremely difficult.

The most notable blow to the city's industry was the shutdown of ArcelorMittal Kryvyi Rih. After a series of Russian missile attacks, the company decided not to restart production under current conditions.

According to ArcelorMittal, the plant experienced four missile strikes over five weeks. Five employees were killed, 17 were injured, and the production infrastructure suffered significant damage.

The company informed the Ukrainian government that it currently sees no possibility of safely and economically sustainably restoring the enterprise's operations. ArcelorMittal plans to maintain its infrastructure in a state that would allow considering the resumption of production after security conditions improve. Due to the situation in Kryvyi Rih, the group also expects an asset write-down of about $1 billion.

Thus, the crisis of Kryvyi Rih's large enterprises is moving from the production sphere directly into city finances: the shutdown of metallurgy and mining means fewer jobs, wages and taxes, from which the infrastructure of one of Ukraine's largest industrial centers is funded.

Based on materials from: Oleksandr Vilkul, ArcelorMittal