Zavallivskyi Graphite, Ukraine’s only natural graphite mining enterprise that has been operating since 1934, has suspended its operations. Two of the key reasons for the shutdown are the high cost of electricity and outdated production infrastructure, which both require significant modernization investment. These factors, together with the increase in logistics costs, significantly increased production cost, preventing the enterprise from maintaining stable operations. The situation is complicated by China’s graphite dumping trade policy, which is actively supplying cheap graphite to the global market and crowding out competitors with unprofitable prices.
The shutdown of the enterprise will have serious consequences for Ukrainian industry, which depends on graphite in key sectors. These include electrode production, the automotive industry, electronics, and defense. Now, the country will have to look for alternative sources of raw material abroad, which may lead to price increases and new economic challenges.