High electricity prices could shut down Ukraine’s largest steel mill.

ArcelorMittal Kryvyi Rih, Ukraine’s biggest steel plant, faces closure because of soaring electricity costs, said the company’s financial director, Pavlo Zadorozhny. He stated that the company has been losing money for the past four years, and that support from the parent company cannot last forever.

In May, the electricity price for ArcelorMittal Kryvyi Rih surpassed €94 per MWh, the highest in Europe. By comparison, in France, where nuclear power is also dominant, the cost was around €20. The primary reasons for this are Energoatom’s monopoly and restrictions on importing cheaper electricity set by Ukrenergo. As a result, Ukraine lacks a true competitive energy market.

“We cannot pass on additional costs to consumers, because the market dictates its prices. If nothing changes, we will not be able to survive,” Zadorozhny warned.

A potential shutdown could have huge consequences, as 18,000 jobs and over $1B in annual foreign exchange earnings are at risk.