Polish customs seize Metalloinvest steel/iron ore

Iron ore concentrate and steel from Russia's Metalloinvest has been seized by Polish customs authorities because of sanctions against its shareholder Alisher Usmanov.

At least one mill in the Visegrad Group of countries has had rail wagons of iron ore concentrate seized by Polish customs at Malaszewicze, at the Malaszewicze-Brest border crossing. The material was in Russian wagons at the time of arrest, where it was due to be transloaded for onwards shipment into Europe. The material did not belong to Metalloinvest as it had already been purchased by steelmakers.

One mill, which had 2,000t seized, will have to stop its sinter plant in five days as a result - concentrate is critical for its charge and it requires a minimum 300-500t/day.

The duty officer at the customs office said it has not halted iron ore concentrate, but that it seized 165t of rebar on 16 May, because of the sanctions against Usmanov. The local customs authority is now waiting for direction from the central customs authorities over how to proceed.

One European steelmaking executive said the seizures were "totally arbitrary" and based on decisions of local authorities, rather than being grounded in the sanctions legislation.

Usmanov was sanctioned by the EU on 28 February. On 1 March this year, Metalloinvest said the sanctions imposed on Usmanov were "ungrounded and unfair" and were of a personal character so they would not impact the company. On 29 April Usmanov lodged an appeal against the sanctions with the EU's General Court, according to a court filing.

Some producers have moved away from Russian raw materials, especially where sanctioned individuals are involved. Legal sources surveyed byArgus said that where a company is controlled by a sanctioned individual, the entity is generally also under sanctions.

Metalloinvest sold more than 10mn t of iron ore into the EU last year, amounting to about 25pc of its total iron ore production. It also sold about 900,000t of pig iron and steel into the bloc.

Metalloinvest did not return requests for comment.

By Colin Richardson and Tomasz Stepien