17 October 2014

Real profit from Volnogorsk Mining and Metallurgical Complex and Irshansk Mining and Concentration Complex

gdf_logoGroup DF considers it necessary to comment questionable statements of politicians within their election campaign about lease of Irshansk and Volnogorsk complexes and Crimea TITAN profit for their use.


The Group officially informs: in 2013 the revenue of Volnogorsk and Irshansk complexes (parts of Crimea TITAN) amounted to UAH 1.5 billion. At the same time Crimea TITAN paid UAH 183 million for the lease of both complexes, and UAH 314 million in taxes to budgets of all levels. Besides employees of these two complexes received UAH 339 million as wages in 2013. Additionally two complexes had production costs; particularly enterprises spent UAH 373 million on energy resources and UAH 196 million on consumables, combustive and lubricating materials. After deduction of all above-mentioned charges and production costs net profit from both complexes was UAH 36 million in 2013.


Thus statements ‘the leaseholder of complexes pays UAH 100 million for lease but earns UAH 1 billion’ are intentional misinformation.


In addition to current charges, the leaseholder invested significant funds in both leased assets. Only in 2013 despite frugal profit margin Crimea TITAN spent UAH 29 million for overhauls and development of Irshansk Mining and Concentration Complex (MCC) and UAH 91 million – for development of Volnogorsk Mining and Metallurgical Complex (MMC). During the whole lease period total investments into development of titanium mining amounted UAH 1.2 billion. The leaseholder bought new equipment at his own expense and it is fully owned by him. Production and profit earning is impossible without this new equipment. Group DF considers statements containing incorrect information about investments into leased complexes as a part of information attack on the Group in the context of situation with violent seizure of Volnogorsk MMC.


Group DF blames actions of those who announce untruthful information about the Group aiming to damage its image. These people misinform and induce the Government to take actions that harm Ukraine. Revenue loss, in particular, exchange revenue, absence of wages source for over 7,000 employees, loss of income for state and local budgets is extremely inopportune for the country. Especially considering that combines were the main source for local budgets.

The Group urges the media not to assist in spreading unreliable information and apply to Group for comments.