The National Association of Extractive Industries of Ukraine (NAEIU) has expressed concern over a 37% increase in Ukrainian Railways (UZ) freight tariffs. The increase, scheduled for May 1, could place significant financial pressure on Ukraine’s mining, metals, and coal industries.
Economic Impact of Tariff Hike
The NAEIU estimates that this tariff hike could lead to an additional UAH 17.5 billion in costs for the industry by the end of 2025. Over the past three years, rail transportation costs have already risen by over 100%. The mining and metals sectors, especially iron and steel production, will bear the most significant burden. The iron and steel industry could face an extra UAH 6.4 billion in costs, while coal mining may incur UAH 1.6 billion in additional expenses.
Consequences for the Economy and Business
This tariff hike will increase production costs, reducing Ukraine’s competitiveness in global markets. Companies may cut production and transportation volumes, leading to downtime for key industries. Additionally, businesses might seek alternative logistics routes, which could disrupt UZ’s cargo turnover.
The Economic Business Association (EBA) has warned that this tariff increase could harm regional economies, risking job losses. The NAEIU believes that while Ukrzaliznytsia (UZ) needs financial stability, drastic tariff hikes should not be the only solution.
Call for Dialogue and Balanced Solutions
The NAEIU is calling for a meeting with Ukrainian Railways to discuss solutions that maintain UZ’s financial stability without harming the competitiveness of Ukrainian industries. This issue affects not only the mining sector but the broader economy of Ukraine.
The industry has already faced challenges due to rising logistics and electricity costs. The NAEIU fears that this new tariff hike could disrupt the mining sector further, leading to more company shutdowns.
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