Kazakhstan: stop exporting iron to Russia. Financial penalties bite

Kazakhstan's largest iron ore producer has cut off supplies to a major steel mill in Siberia, as the repercussions of international sanctions against Russia disrupt economic ties between these two members of the Eurasian Economic Union, a free trade zone . The Sokolov-Sarybai Mining Association in northern Kazakhstan was the primary supplier of ore to the Magnitogorsk steel mill until Russia's invasion of Ukraine.

Known by the acronym SSGPO, the Kazakh plant, based in Rudniy, supplied 70% of the ore supplied by the Magnitogorsk steel mill, which is only 340 kilometers away. The Russian plant, often abbreviated to MMK, obtained the rest from suppliers in Russia.

Due to disruption of supplies from Kazakhstan, MMK was forced to stock up on ore nearly 2,000 kilometers away, Russian newspaper Vedomosti reported on May 17, citing unnamed sources from both companies.

"Problems with iron ore supplies arose at MMK after the start of the Russian special military operation in Ukraine and large-scale sanctions against the Russian Federation," the newspaper said, using the euphemism for war. that the Russian media are legally obliged to write.

News of SSGPO's halting of shipments to Russia surfaced in April, Vedomosti noted.

The majority shareholder and chairman of MMK, Viktor Rashnikov, is subject to international sanctions, which the company has dismissed as "unfounded".

Kazakh companies are under no obligation to apply international sanctions against Russian persons or entities. However, many of them fear being associated with the Russian government and harm to their international trade.

MMK is sourcing replacement ore from two enrichment plants on the Russian border with Ukraine. These plants are owned by Alisher Usmanov, a Russian oligarch under international sanctions, through his steel company Metalloinvest.

"There are no interruptions in [supplies] of raw materials," an anonymous source from MMK told Vedomosti. The company "has already started buying larger volumes of iron ore from Russian producers."

Obviously the Kazakh producers will now try on the international markets to place the ferrous semi-finished products that are now no longer destined for Russia. This is one of several ways sanctions break established markets, causing chaos and price increases that then spill over to all citizens.

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The article Kazakhstan: stop exporting iron to Russia. The financial penalties bite comes from ScenariEconomici.it .

This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/kazakhistan-stop-allexport-di-ferro-verso-la-russia-le-sanzioni-finanziarie-mordono/ on Mon, 23 May 2022 15:41:54 +0000.