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Azovstal: A history Journalist Konstantin Skorkin tells the story of the steelworks that lay at the heart of Mariupol life

Source: Meduza

One year ago, Russian forces were laying siege to Mariupol. Its famous Azovstal Iron and Steel Works had come to serve as a stronghold for the last Ukrainian soldiers defending the encircled city, as well as a refuge for desperate civilians. Those who managed to escape Mariupol said the Russian assault turned their hometown into “hell on earth.” Journalists report that as many as 75,000 people were killed in Mariupol alone; villages on the city’s outskirts now harbor sprawling mass graves

Meanwhile, Azovstal’s vast grounds — like most of Mariupol — lie in ruins. The Russian authorities, who are alternately tearing down and slapping up buildings in an apparent effort to cover up war crimes and salvage a city their troops razed to the ground, have decided not to rebuild Azovstal. One Construction Ministry official deemed the plant’s reconstruction an “impossible and unprofitable” task. With 2023 marking 90 years since Azovstal first began operations, The Beet shares a brief history of the steelworks that lay at the heart of Mariupol life, as told by journalist and researcher Konstantin Skorkin.

The following is an abridged translation that appeared in The Beet, a weekly email dispatch from Meduza covering Central and Eastern Europe, the Caucasus, and Central Asia. Sign up here to get the next issue delivered directly to your inbox. The original article was published by Kit, a Russian-language newsletter from the creators of Meduza.

The city of Mariupol sits on the coast of the warm Sea of Azov, at the mouth of Kalmius River, which flows through Ukraine’s Donetsk region. Thanks to nearby coal and iron ore deposits in the Donbas and Crimea, it has been a center for heavy industry since the beginning of the industrial boom in the late 19th century. 

Back then, the largest factory in the region was the Russian Providence metallurgical plant. Founded by Belgian capitalists and built by American engineers, it produced cast iron and sheet metal. After the Bolsheviks took power in 1917, they nationalized the factory and named it the Ilyich Iron and Steel Works, in honor of their leader, Vladimir Lenin. It would go on to become one of the key metallurgical enterprises of the USSR and, later, independent Ukraine. 

But by 1930, Mariupol’s one metallurgical plant wasn’t enough to meet the needs of Soviet industrialization. The authorities decided to build another one: Azovstal. 

The construction, destruction, and resurrection of Azovstal

The Azovstal Iron and Steel Works launched production in August 1933. Its construction cost a total of 292 million rubles — a sum that would be huge today (equivalent to $3.5 million) but was astronomical back then. The plant’s design capacity was more than two million tons of cast iron per year, but this figure was expected to double in the future. 

A young Soviet manager named Yakov Gugel led the plant’s construction and went on to become its first director. He was a typical industrialization-era boss who relied on party directives and mobilized workers to take their quotas by storm. By all appearances, Gugel dreamed of creating the most powerful metalworks on the planet; the world’s largest steel mill at the time was the Gary Works in Indiana, which produced three million tons of cast iron per year. But Gugel’s ambitions didn’t save him from a tragic fate: he was arrested and shot during Stalin’s purge in 1937, and his wife spent years in the Gulag camps.  

A statue of Joseph Stalin on the grounds of a steel mill in Mariupol. USSR, 1940.
Sovfoto / Universal Images Group / Getty Images

By the beginning of World War II, Azovstal had become a titan of Soviet industry, with four blast furnaces and six open-hearth furnaces in operation. When Nazi troops occupied Mariupol in October 1941, the plant’s workers had already turned off the furnaces and evacuated east along with most of its equipment, but the factory’s facilities remained in place. The Nazi authorities tried to restore production, but Soviet air raids and sabotage carried out by partisans prevented the plant from operating at full capacity. 

The Nazis blew up Azovstal’s main facilities during their retreat from the city in 1943, destroying the plant almost completely. Nearly 85 percent of the buildings in Mariupol proper were destroyed during the war. (According to the U.N. Human Rights Office, Russia’s 2022 invasion damaged or destroyed 90 percent of Mariupol’s residential buildings.)

Large-scale restoration work on Azovstal began immediately after Mariupol’s liberation from German troops. Seeking to finish the job as soon as possible, a team of Soviet engineers conducted a never-before-seen experiment. The plant’s most powerful blast furnace, weighing some 2,600 tons, hadn’t been destroyed when the Nazis blew up the factory — it had shifted and now stood on a slant. Rather than taking years to disassemble and reassemble the furnace, the engineers managed to level it quickly using hydraulic jacks. This feat earned them the Stalin Prize

By 1945, Azovstal had resumed operations, and its iron and steel production returned to pre-war levels by the end of the decade. The means by which the Soviet authorities achieved this stunning result should not be overlooked: Gulag prisoners and former Soviet prisoners of war — who were supposed to atone for the “shame” of falling captive — were front and center in the reconstruction work. 

According to Ukrainian historians Stanislav Kulchytsky and Larysa Yakubova, more than 7,000 inmates were involved in the reconstruction of Azovstal in 1947 alone. By May 1949, more than 61,400 former POWs and deportees from Germany had been brought to the Stalino (Donetsk) region in total. These people labored in harsh conditions and were forbidden from leaving their assigned places of work. This is how the author’s own grandfather found himself in the Donbas: Following his release from German captivity, he wasn’t allowed to return home. Instead, he was sent to help rebuild the Luhansk region, where he ended up staying. 

Life was hard in post-war Mariupol. Lawyer and economist Nina Pokrovskaya, who traveled from Moscow to Azovstal on a business trip in December 1947, wrote the following in her diary: “You can’t buy anything in the city. Market prices have risen to unprecedented levels in a week. A loaf of bread that used to cost 30 rubles in the market now costs 200. The shops are empty.”

In addition to hunger and hyperinflation, Mariupol residents faced a typhus epidemic. Pokrovskaya described horse-drawn ambulances carrying typhus patients with “gray, dead faces.” “Hospitals, disinfection rooms, bathhouses, doctors who check every worker at the factory daily, and lice everywhere — fat, translucent typhoid lice. In the eyes of the sick and dying half-starved people lurks the complete helplessness of the doomed,” she wrote.  

The Soviet authorities renamed Mariupol after World War II. From 1948 to 1989, the city was known as Zhdanov — a tribute to Joseph Stalin’s “propagandist-in-chief,” Mariupol native Andrey Zhdanov

After surviving the epidemic and the famine, the Azovstal plant entered into a golden age. In 1948, the factory began to produce railroad tracks, in addition to smelting metal. To this day, these tracks make up two thirds of the railway lines across the former USSR. Indeed, Yakov Gugel’s dream came true after all — Azovstal became one of the largest metalworks in the world. It was akin to a city within a city: its sprawling area of 11 square kilometers (four square miles) exceeded that of the Vatican and Monaco. 

Azovstal also boasted an extensive network of underground shelters, built during the Cold War in case of a nuclear strike. It was these 36 bomb shelters, connected by 24 kilometers (15 miles) of tunnels, that allowed Ukrainian forces holed up inside Azovstal to withstand Russia’s siege in 2022 for more than two months. 

Ukrainian soldiers inside the Azovstal Iron and Steel Works complex during Russia’s siege of Mariupol. May 20, 2022.
Dmytro Orest Kozatskyi / Azov Regiment press service / Reuters / Scanpix / LETA

Hard times and new owners

The economic decline of the late 1980s and the Soviet Union’s subsequent collapse hit the Azovstal Iron and Steel Works hard. Massive metallurgical production, though effective within the framework of a large planned economy, degraded under market conditions. Equipment grew outdated and, due to the collapse of the USSR’s unified production system, the plant lost its standing orders. 

The so-called “Red directors” failed to cope with the crisis. And yet, Azovstal remained a coveted prize: in the 1990s, its products brought in 10 percent of Ukraine’s total foreign exchange earnings. Around the same time, the plant came under the control of the Industrial Union of Donbas (ISD), a holding company co-founded in 1995 by Donetsk businessmen Serhiy Taruta (who is now a Ukrainian lawmaker), Oleh Mkrtchian (who is currently serving time in Russia for economic crimes), and Vitaliy Haiduk (who held a number of high-level government positions in the 2000s). The ISD provided the plant with energy and raw materials, gradually bought up its shares and, by the end of the decade, completely took over the enterprise for next to nothing. 

Former Mariupol Mayor Mykhailo Pozhyvanov later claimed that Azovstal’s privatization was made possible due to the ISD leadership’s corrupt ties with officials in Kyiv and Donetsk. 

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In 2002, shareholder Rinat Akhmetov left the ISD, taking Azovstal with him. The plant came under the control of Akhmetov’s financial and industrial conglomerate, System Capital Management (SCM). It would later become a division of the steel and mining group Metinvest, an SCM subsidiary co-owned by Akhmetov and his business partner Vadym Novynskyi. Today, Akhmetov is considered Ukraine’s wealthiest billionaire, while Novynskyi ranks eighth

Under its new ownership, Azovstal remained one of the most profitable economic assets in Ukraine. Moreover, it helped develop local infrastructure, such as hospitals, a stadium, and schools. In 2010, Azovstal ranked fourth among the country’s most successful enterprises.

However, in 2011, the authorities deemed Azovstal one of Ukraine’s “dirtiest” industrial facilities. The factory’s Soviet designers prioritized economic expediency and gave little thought to the environment. And so for decades, the sea breeze had spread Azovstal’s harmful emissions throughout residential areas and the coastal zone. In 2012, environmental protests swept Mariupol, forcing Akhmetov’s representatives to negotiate with the protesters about reducing emissions. According to local activists, this was when Mariupol’s civil society was born. 

The factory also played a key role in the city’s political life. The management of local metalworks and other major industries in the Donbas shaped the course of elections. Industrial workers were strongly encouraged to vote for specific candidates, and they obeyed for fear of losing their jobs. In the 1990s and 2000s, constituencies in “factory districts” — where large enterprises were located — often elected factory bosses to local councils and the national parliament. Mariupol’s current mayor, the exiled Vadym Boychenko, is himself a former Metinvest top manager who got his start at the Azovstal plant. 

It wasn’t difficult for “factory candidates” to trounce their competitors: prior to Russia’s 2022 occupation of Mariupol, Metinvest controlled all of the city’s television channels and newspapers. According to local journalist and civil activist Anna Murlykina, the company created a quasi-feudal system in Mariupol and effectively controlled every aspect of city life. “The entire city leadership was linked to Metinvest, which paid them money. Not directly, but through relatives,” that is, family members employed by Metinvest, Murlykina explained. Government bodies, she added, wouldn’t even take on new employees without the Metinvest office greenlighting the candidates. 

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The 2013–2014 Euromaidan Revolution and the war in the Donbas that followed inevitably impacted the Azovstal plant. After the formation of the self-proclaimed Donetsk and Luhansk “people’s republics,” the factory lost access to coal from the mines in occupied areas. This initially led to a decline in production, but by 2016 the factory had bounced back. Metinvest said that it had diversified its suppliers, bringing in coal from Canada, Australia, Indonesia, and Russia. However, claims circulated that Akhmetov’s corporation continued to buy coal from Ukraine’s occupied territories. 

Ukrainian forces managed to hold Mariupol in 2014. After the armed clashes in the city that May, Azovstal’s management decided to restore the factory’s bomb shelters and equip them for long-term defense. Unfortunately, this was not in vain. 

Finding a future in the ruins 

Mariupol was one of the first victims of Russia’s full-scale invasion of Ukraine. When Russian forces laid siege to the city in the spring of 2022, the Azovstal plant was all but destroyed. Metinvest estimates its losses in Mariupol at a staggering $10 billion.

Smoke rises above a plant at the Azovstal Iron and Steel Works complex during Russia’s siege of Mariupol. April 25, 2022.
Alexander Ermochenko / Reuters / Scanpix / LETA

Akhmetov’s lawyers are preparing to bring lawsuits against Russia in international courts, but with the war still raging, it’s difficult to predict whether they’ll be able to extract any compensation. Mariupol remains under Russian occupation, but Akhmetov’s System Capital Management is confident that Ukraine will emerge victorious and retake the city. As such, the company is already making plans to revive the local industrial potential, which will require international support. “We will definitely need an unprecedented international recovery program — a Marshall Plan for Ukraine,” Akhmetov underscored last April. 

Market players speculate that SCM will eventually merge Ukraine’s two largest metalworks — the Ilyich Iron and Steel Works and Azovstal — and make them more environmentally friendly. As unlikely as this may sound right now, Akhemtov’s enterprises were already moving in that direction before Russia’s 2022 invasion. In 2021, for example, his energy holding DTEK partnered with Germany’s Siemens Energy on a pilot project for the production of hydrogen fuel.

Despite Ukraine’s decommunization efforts, the Ilyich Iron and Steel Works’s management found a way to keep its historical name: they “renamed” the plant after another prominent Ilyich — metallurgist Zot Ilyich Nekrasov.

However, the city of Mariupol will have to be rebuilt, too — not just its industrial potential. This won’t be easy, but both Mariupol and Azovstal were resurrected from ruins after World War II. The Soviet Union actually rejected foreign aid and achieved its postwar reconstruction goals through the sheer exploitation of its own citizens. With the active support of international partners and the use of modern technologies, Ukraine should have an easier time rebuilding both the city and the plant. 

That said, there’s also an alternative vision for Mariupol’s future. Journalist Anna Murlykina argues that the city needn’t remain an industrial center after its liberation. “It will become a pilgrimage site for ‘sorrow tourism.’ People from all over Europe will want to see with their own eyes what modern Nazism is,” Murlykina said. This would require conserving some of the damage to the city, but could, in turn, provide an impulse for the development of tourism infrastructure and small businesses, she continued. 

Murlykina also thinks that diversifying the economy would help change the city’s socio-political image. Moreover, Mariupol has positive experience with change: from 2014 until the 2022 invasion, small- and medium-sized businesses were expanding, and European investors were underwriting the city’s development. “If all the programs planned until 2030 had continued, it would be a completely different city, on par with Poland’s Gdańsk,” Murlykina said. At the same time, she acknowledges that such a transformation may never take place now, given the current circumstances. Mariupol risks becoming a city with no work, where no one will want to live. 

An aerial view of the damage in Mariupol’s central district. May 18, 2022.
Andrey Borodulin / AFP / Scanpix / LETA

Researcher Oleksandr Zabirko, who studies how the Donbas compares to other post-industrial regions of Europe (such as the Ruhr and Upper Silesia), believes that there’s no industrial future for the region. But the mentality of its inhabitants and elites won’t change overnight. Representatives of German foundations that carried out humanitarian projects in the Donbas last summer told Zabirko that local residents were only interested in discussing the reindustrialization of the Donbas, in the hopes that the E.U. would sink money into its dilapidated factories and mines (“to get the smoke going again”).  

“I doubt that European investors will want to rebuild monstrous Soviet factories like Sievierodonetsk’s Azot or Azovstal, and their role in Ukraine’s recovery will be key,” Zabirko concluded.  

Be that as it may, regional identity is harder to destroy than a factory or even a city. As Zabirko pointed out, a region’s identity is often built on memories of the past, but with time, other identities — national or ideological ones, for example — may come to the fore. Much will depend on the outcome of the war, which has no end in sight.

And so, Mariupol’s future — and the fate of Azovstal along with it — remains lost in the fog of war. The city’s Russian occupiers aren’t going to rebuild the iconic factory. Instead, Azovstal’s ruins stand as a monument to the Ukrainian people’s heroic resistance and a symbol of the crimes of Putin’s militarism. 

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Story by Konstantin Skorkin for Kit

Abridged translation by Eilish Hart for The Beet

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