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Wednesday, August 19 – Ferrexpo Poltava Mining marked half a billion tons of iron ore concentrate

Poltava Mines Enough Iron Ore to Build 100 Egyptian Pyramids...Cargill Loans €250 Million to Ukraine...Ad Agencies Expand...Kyiv’s Cautious Corona Curbs
James Brooke
by James Brooke
UBN Morning News is reported and written by James Brooke, a former New York Times foreign correspondent and Bloomberg Moscow Bureau Chief

Ferrexpo Poltava Mining marked this month half a billion tons of iron ore concentrate produced since the mine opened 50 years ago. “The first ton of concentrate was produced in 1970, and after 50 years of operation, PGOK produced the 500-millionth one,” said Viktor Lotous, Board Chairman of Poltava GOK. Over the last 20 years, $3 billion has been invested in Poltava Mining, he said. With demand high in China,  the mine and processing plant shipped a record 1.1 million tons of iron ore pellets in March. For comparison, 500 million tons is 93 times the weight of Egypt’s largest pyramid, the Great Pyramid of Giza, according to The Heaviest Objects in the World.

Ukraine is to raise up to €250m in two loans from Cargill Financial Services, the Cabinet of Ministers reported Monday. The loans are to be: three years at 5.95% and five years at 6.85%. One year ago, the Finance Ministry conducted a similar operation, borrowing from Cargill at slightly lower rates:  €100 million for two years at 5.15% and €150 for five years at 6.25%.

Concorde Capital’s Alexander Paraschiy writes of the new loans: “The conditions under Cargill’s private loan look close to market rates, taking into account that Ukraine’s public six-year debt (EUR-denominated Eurobond maturing in June 2026) trades currently at 6.61% YTM. The loan will allow Ukraine to partially compensate the large foreign currency debt outlays of August-September, which amount to about $3 billion.”

    The Finance Ministry raised the equivalent of $91 million in its weekly government bond auction yesterday – one quarter the $366 million raised one week earlier. Highlights were: 6-month hryvnia bonds placed at 7.82%; 2-year hryvnia bonds placed at 10.14%; and 8-month dollar bonds placed at 3.39%.

    Due to the corona-recession, state budget revenues are $1.4 billion below plan for the first half of this year, Valery Patskan, chairman of the Accounting Chamber, writes on Facebook. About 37% of the drop is due to a fall in customs duties due a 20% drop in imports during the first half.

    Watching “the sharp aggravation of the situation in the Republic of Belarus,” President Zelenskiy said after a security council meeting Monday night: “The events in this country could significantly affect Ukraine.” But hours earlier, as labor slowdowns spread through Belarus’ two oil refineries, the Cabinet of Ministers reintroduced special duties on imports from Russia of: liquefied gas (3%), diesel (4%), and most types of coal (65%).  The duties expire Dec. 31.

    Pre-election populism at the Rada. President Zelenskiy vetoed a bill that would extend through the end of next year the moratorium on foreclosures for foreign currency mortgage loans. Why? The way the Rada sponsors worded the bill last month, it would have banned foreclosures under any loan agreement. As written, the bill would have brought “chaos into Ukraine’s entire financial system,” writes Concorde’s Paraschiy.

    Banda, a leading Ukrainian ad agency, is opening an office in California, its first office outside of Kyiv. Yaroslav Serdyuk, the agency’s co-founder and strategy director, writes on Facebook from California: “We already have four ongoing projects in the U.S.: designing a brand identity for a promotional campaign of a Hollywood film, brand creation for two investment funds, and we are also preparing to launch a new campaign for a cannabis brand.”

    France’s MSL public relations company is opening an office in Kyiv, strengthening parent company Publicis Groupe’s presence in Ukraine. The new office will be led by Olena Sukhanova, a 9-year veteran of Ukrainian marketing agency Tabasco.  Last year, MSLGROUP was the only European company in the top10 of the Holmes Report 250 Global Ranking of PR Firms.

    The founders of Nova Poshta are investing in Fedoriv Agency’s Kooperativ co-working space at 23 Sichovykh Striltsiv, Kyiv. The investors, Viacheslav Klimov and Volodymyr Popereshniuk, plan to convert the ad agency’s existing space in Arena City into a working hub with places for 100 people.

    With Ukraine reporting record levels of new Covid-19 infections – about 1,600 a day for the last week – Kyiv is mildly tightening restrictions this week. Everyone is to carry an ID on the street. Masks are to be worn in ‘indoor public spaces’ and on all public transport. Trams, trolleybuses, buses and minibuses carry only seated passengers. But the metro allows standees. Kyiv tightened restrictions after Covid-19 cases occupied 52% of reserved hospital beds. In the five months of the virus, 2,116 Ukrainians have died of the disease, including 155 in Kyiv.

    Schools will open as scheduled Sept. 1, Health Minister Maksym Stepanov promises. Online learning will be mandatory only in the nation’s ‘Red Zones.’ Currently these are three towns and five districts – less than 1% of Ukraine’s 37 million people. In one ‘Red Zone’ city, Lviv region’s Sambir, the town council refused to tighten restrictions after local business owners protested outside the council building.

    With local elections coming in two months, politicians have no appetite for a return to the severe lockdown of last spring. Concorde Capital’s Zenon Zawada writes: “The Zelenskiy administration has largely remained silent on the surge in infections. Moreover, no significant quarantine and lockdown restrictions have been introduced. Only in Kyiv and two regions are hospital bed occupancy rates exceeding 50%, indicating that the situation is relatively stable despite the surge.”

    Orthodox Jewish pilgrims are asked to refrain from visiting Uman next month to celebrate Rosh Hashanah, “due to the threatening epidemiological situation,” according to a joint statement by Israel and Ukraine. In a normal year, 30,000-50,000 Orthodox make the pilgrimage. This year, it would be Sept. 18-20.  Interior Minister Arsen Avakov said that last month the government reached a similar agreement with Ukraine’s Orthodox churches to refrain from the traditional July 28 mass processions celebrating the Christianization of Kyivan Rus.

    Returning to the air after coronavirus travel curbs, UIA had to “start practically from scratch,” to rebuild business, airline president Yevgeny Dykhne writes on Facebook. From mid-June to mid-August, Ukraine’s flag carrier carried 113,345 passengers on 1,238 flights. Last year, the airline carried 4 million passengers.

    Marta Kolomayets, American director of the Fulbright Program in Ukraine for seven years, died Sunday at the age of 61 after a long illness. As the local head of Fulbright, she helped more than 300 Ukrainians pursue Masters and Doctorate degrees at US universities. The daughter of Ukrainian emigres, Kolomayets first visited the Ukrainian SSR in 1985, but was kicked out for filming interviews with Soviet dissidents. She returned in 1990s, opening the Kyiv bureau of the Ukrainian Weekly, the first foreign media bureau in modern Ukraine.

    From the Editor – During the first half of this month, 74,000 Ukrainians vacationed in Antalya, the resort city on Turkey’s ‘Turquoise Coast.’ Ukrainians almost outnumbered Brits and Germans combined. This morning, I do my bit for Turkish tourism, flying with my family to Bodrum, on the Aegean. Thanks to help from the UBN research assistant in Kyiv, this email will not skip a beat during my one-week vacation. With Best Regards, Jim Brooke