Investment programme

In February 2014, NLMK announced a new phase of the Company’s strategy. Following expansion of the scale of the business, capital-intensity decreases and the focus shifts to enhancing operational efficiency.

In 2007-2012, NLMK invested $9 billion, thanks to which it was able to almost double its steelmaking capacity; expand its product mix; improve product quality, occupational health and safety; and reduce its environmental footprint.

  • Launch of BF-7 and a new BOF in 2011 supported the expansion of Novolipetsk steelmaking capacity to 12.4 million tonnes.

  • Following the launch of NLMK Kaluga in 2013, the next generation mini-mill, NLMK expanded its presence in the Russian long product market.

  • Following the launch of the Quenching and Tempering Line at NLMK Clabecq in 2011, NLMK mastered the production of unique Quard and Quend plate grades.

Key investment projects of NLMK Group

  • 2000-2006
  • 2007-2010
  • 2011-2015

2000

Lipetsk site

Cogeneration plant – Installation of turbogenerator No.1 with a capacity of 50 MW

Investment, USD million (with VAT):8

Results:

Increase in energy generation. Share of captive energy generation in excess of 30% of the plant’s total energy consumption.

USD rate:28,1145

Investment, RUB billion (with VAT):0.2

Lipetsk site

Steelmaking slag preparation shop – Construction of BF-6 sludge dewatering unit

Investment, USD million (with VAT):2

Results:

Dewatering of BF-6 sludge in the amount of 50,000 tonnes per year for its subsequent use in production.

USD rate:28,1145

Investment, RUB billion (with VAT):0.05

2001

Lipetsk site

Water supply shop. Construction of a pump filter station for residual waters in the Mill-2000 closed-loop water cycle

Investment, USD million (with VAT):4

Results:

Recirculating water use in the amount of 1500 m3 per hour; reduction of water consumption from River Voronezh.

USD rate:29,1682

Investment, RUB billion (with VAT):0.1

Lipetsk site

Cogeneration plant - Installation of turbogenerator No.7 with a capacity of 50 MW

Investment, USD million (with VAT):13

Results:

Increase in energy generation. Share of captive energy generation in excess of 38% of the plant’s total energy consumption.

USD rate:29,1682

Investment, RUB billion (with VAT):0.4

Lipetsk site

Dynamo steel production – Construction of hot dip galvanizing line No.2 based on the existing continuous annealing line

Investment, USD million (with VAT):16

Results:

Increase in hot dip galvanized steel production by 140,000 tonnes per year.

USD rate:29,1682

Investment, RUB billion (with VAT):0.5

2002

Lipetsk site

BOF Shop No.1 - Complex of curved-type continuous casting machine No.4 and construction of ladle metallurgy facility Nos. 4 and 6

Investment, USD million (with VAT):69

Results:

Increase in productivity of the continuous casting machine to 2 million tonnes per year coupled with an improvement in the quality of cast slabs.

USD rate:31,3474

Investment, RUB billion (with VAT):2.2

Lipetsk site

Cold rolling and coating operations – Electroerosion roll texturing machine

Investment, USD million (with VAT):5

Results:

Improved surface quality of cold-rolled steel.

USD rate:31,3474

Investment, RUB billion (with VAT):0.1

Lipetsk site

Hot rolling operations – Construction of a hot-rolled strip preparation and slitting unit

Investment, USD million (with VAT):6

Results:

Increase in HSM productivity; increase in coil mass; decrease in consumption rates. Unit production capacity: 400,000 tonnes per year.

USD rate:31,3474

Investment, RUB billion (with VAT):0.2

2003

Lipetsk site

BOF Shop No.1 - Overhaul of vacuum degasser

Investment, USD million (with VAT):7

Results:

Production of high-quality steels that require vacuuming; increase in unit productivity when treating IF and dynamo steel (3rd and 4th alloy groups).

USD rate:30,6877

Investment, RUB billion (with VAT):0.2

Lipetsk site

Cold rolling and coating operations – Construction of a cold-rolled strip preparation and inspection unit

Investment, USD million (with VAT):17

Results:

Increase in strip slitting capacity by 300,000 tonnes per year; finished strip surface quality control and on-line sorting.

USD rate:30,6877

Investment, RUB billion (with VAT):0.5

Lipetsk site

Hot rolling operations – Reconstruction of reheating furnace No. 5

Investment, USD million (with VAT):29

Results:

Increase in furnace productivity to 320 tonnes per hour; decrease in specific fuel consumption by 29.5 kg (of reference fuel)/tonne; decrease in metal losses by 7.7 kg/tonne.

USD rate:30,6877

Investment, RUB billion (with VAT):0.9

2004

Lipetsk site

Cogeneration plant - Expansion of the Cogeneration plant/Steam plant with boiler No.13

Investment, USD million (with VAT):9

Results:

Additional production of steam in the amount of 220 tonnes per hour to serve the needs of the Cogeneration plant and Oxygen plant.

USD rate:28,8150

Investment, RUB billion (with VAT):0.3

Lipetsk site

BOF Shop No.2 - Construction of pig iron desulfurization unit

Investment, USD million (with VAT):13

Results:

Desulfurization of pig iron in the amount of 3.2 million tonnes per year.

USD rate:28,8150

Investment, RUB billion (with VAT):0.4

Lipetsk site

Gas Shop – Production of hydrogen through natural gas reforming

Investment, USD million (with VAT):21

Results:

Decrease in hydrogen production cost. Productivity of the new unit: 6,000 m³/hour.

USD rate:28,8150

Investment, RUB billion (with VAT):0.6

Lipetsk site

Cold rolling and coating operations - Construction of pre-painting line No.2

Investment, USD million (with VAT):64

Results:

Increase in production of pre-painted steel by 200,000 tonnes per year.

USD rate:28,8150

Investment, RUB billion (with VAT):1.8

2005

Lipetsk site

BF Shop No.1 – Reconstruction of Blast Furnace No. 5 cast yard dedusting system

Investment, USD million (with VAT):26

Results:

Decrease in dust emissions by 15,300 tonnes; improvement in working conditions.

USD rate:28,2864

Investment, RUB billion (with VAT):0.7

Lipetsk site

Coke and chemical operations - Reconstruction of coke battery No.1

Investment, USD million (with VAT):64

Results:

Increase in coke battery productivity from 410,000 to 460,000 tonnes of coke per year; decrease in environmental footprint; high level of mechanization of labour-intensive activities.

USD rate:28,2864

Investment, RUB billion (with VAT):1.8

Lipetsk site

Cold rolling and coating operations – Hot-dip galvanizing facility with HDGL-3

Investment, USD million (with VAT):103

Results:

Increase in HDG output by 340,000 tonnes per year.

USD rate:28,2864

Investment, RUB billion (with VAT):2.9

2006

Lipetsk site

Waste water treatment – Reconstruction of utility and industrial waste water treatment

Investment, USD million (with VAT):10

Results:

Increase in the quality of waste water treatment.

USD rate:27,1852

Investment, RUB billion (with VAT):0.3

Lipetsk site

Cogeneration plant - Installation of a 25 MW turbogenerator

Investment, USD million (with VAT):11

Results:

Increase in energy generation. Share of captive energy generation totalled 42.8% of total energy consumed.

USD rate:27,1852

Investment, RUB billion (with VAT):0.3

Lipetsk site

BOF Shop No. 1 - Pig iron desulfurization unit in ladles

Investment, USD million (with VAT):30

Results:

Desulfurization of pig iron in the amount of 3.6 million tonnes per year.

USD rate:27,1852

Investment, RUB billion (with VAT):0.8


2007 year

Lipetsk site

Slag preparation shop - Construction of knock-out facility sizing unit

Investment, USD million (with VAT):7

Results:

Production of fractional broken slag in the amount of 500,000 tonnes per year

USD rate:25,5770

Investment, RUB billion (with VAT):0.2

Lipetsk site

Hot rolling operations – Reconstruction of Mill 2000 remover

Investment, USD million (with VAT):57

Results:

Increase in hot-strip mill productivity by 27,000 tonnes per year; increase in coiling quality.

USD rate:25,5770

Investment, RUB billion (with VAT):1.4

Lipetsk site

Hot rolling operations – Reconstruction of reheating furnace No.4

Investment, USD million (with VAT):63

Results:

Increase in furnace productivity to 320 tonnes per hour; decrease in fuel consumption by 29.5 kg (of reference fuel)/t; decrease in metal loss by 6.7 kg/t.

USD rate:25,5770

Investment, RUB billion (with VAT):1.6

Lipetsk site

Coke and chemical operations – Reconstruction of coke battery No.2

Investment, USD million (with VAT):71

Results:

Increase in coke battery productivity from 410,000 to 460,000 tonnes of coke per year; decrease in environmental footprint; high level of mechanization of labour-intensive activities.

USD rate:25,5770

Investment, RUB billion (with VAT):1.8

2008 year

Lipetsk site

Cogeneration plant - Replacement of 25 MW turbogenerator No. 2

Investment, USD million (with VAT):18

Results:

Increase in energy generation. Share of captive energy generation totalled 43.8% of total energy consumed. Increase in reliability of energy supply.

USD rate:24,8553

Investment, RUB billion (with VAT):0.4

Lipetsk site

Oxygen shop - Construction of air separation unit No.5

Investment, USD million (with VAT):30

Results:

Additional production of oxygen – 34,000 m³ per hour; secured reliable oxygen supply to consumers.

USD rate:24,8553

Investment, RUB billion (with VAT):0.7

Lipetsk site

Oxygen shop - Construction of air separation unit No.4

Investment, USD million (with VAT):41

Results:

Additional production of oxygen – 34,000 m³ per hour; secured reliable oxygen supply to consumers.

USD rate:24,8553

Investment, RUB billion (with VAT):1.0

Lipetsk site

BOF Shop No.2 – Reconstruction of continuous casting machine (CCM No. 6)

Investment, USD million (with VAT):175

Results:

Increase in CCM productivity to 2 million tonnes per year coupled with improved slab quality.

USD rate:24,8553

Investment, RUB billion (with VAT):4.3

Lipetsk site

Water supply – Upgrade of the plant’s technical water supply system

Investment, USD million (with VAT):28

Results:

Decrease in consumption of fresh river water and discontinued waste water discharge into Voronezh River.

USD rate:24,8553

Investment, RUB billion (with VAT):0.7

2009 year

Lipetsk site

BOF Shop No.2 - Reconstruction of continuous casting machine (CCM No. 7)

Investment, USD million (with VAT):109

Results:

Increase in CCM productivity to 2 million tonnes per year coupled with improved slab quality.

USD rate:31,7231

Investment, RUB billion (with VAT):3.5

Lipetsk site

Dynamo steel production - Construction of continuous hot-dip galvanizing line No.4

Investment, USD million (with VAT):79

Results:

Increase in HDG output by 300,000 tonnes per year.

USD rate:31,7231

Investment, RUB billion (with VAT):2.5

2010 year

Lipetsk site

BOF Shop No.1 – Reconstruction of BOF gas exhaust ducts

Investment, USD million (with VAT):214

Results:

Collection and cleaning of secondary emissions during BOF turndown; replacement of worn-out equipment.

USD rate:30,3692

Investment, RUB billion (with VAT):6.5

Lipetsk site

BOF Shop No.2 – Construction of two ladle furnaces

Investment, USD million (with VAT):109

Results:

Increase in shop productivity by 150,000 tonnes of steel per year; possibility to process up to 90% of steel from BOF Shop No.2 in ladle furnaces. Expansion of product mix.

USD rate:30,3692

Investment, RUB billion (with VAT):3.3

Lipetsk site

Dynamo steel production - Construction of pre-painting line No.3

Investment, USD million (with VAT):112

Results:

Increase in production of pre-painted steel by 200,000 tonnes per year.

USD rate:30,3692

Investment, RUB billion (with VAT):3.4

Lipetsk site

Dynamo steel production – Construction of a reversing mill

Investment, USD million (with VAT):53

Results:

Increase in production of cold-rolled steel by 125,000 tonnes per year. Rolling modes adjusted to produce nano-structured high-permeability electrical steel.

USD rate:30,3692

Investment, RUB billion (with VAT):1.6

Lipetsk site

Transformer steel production – Construction of insulation coating and straightening annealing unit

Investment, USD million (with VAT):44

Results:

Improvement in electro-magnetic properties and the quality of insulation coating of transformer steel.

USD rate:30,3692

Investment, RUB billion (with VAT):1.3

2011 year

Lipetsk site

BOF Shop No.2 - Construction of BOF No.1 with shop expansion

Investment, USD million (with VAT):599

Results:

Increase in shop productivity to 8.2 million tonnes per year; supports production of 12.4 million tonnes of steel at NLMK.

USD rate:29,3874

Investment, RUB billion (with VAT):17.6

Lipetsk site

Blast furnace No.7 with a 150 MW recovery cogeneration plant

Investment, USD million (with VAT):1484

Results:

Increase in pig iron production capacity by 3.4 million tonnes per year to support steel output of 12.4 million tonnes per year. Generation of 800 million kW hour per year of energy from by-product BF gases.

USD rate:29,3874

Investment, RUB billion (with VAT):43.6

Lipetsk site

BOF Shop No.2 - Reconstruction of continuous casting machine (CCM No. 8)

Investment, USD million (with VAT):159

Results:

Increase in CCM No. 8 productivity to 2.5 million tonnes per year; product mix expansion (slabs 355 mm thick; 2,200 mm wide); improvement in surface quality and macrostructure of slabs

USD rate:29,3874

Investment, RUB billion (with VAT):4.7

Lipetsk site

BOF Shop No.1 - Upgrade of continuous casting machine (CCM No.3)

Investment, USD million (with VAT):133

Results:

Increase in CCM productivity to 1 million tonnes per year. Expansion of slab product mix.

USD rate:29,3874

Investment, RUB billion (with VAT):3.9

Lipetsk site

BOF Shop No.2 - Construction of an RH vacuum degasser

Investment, USD million (with VAT):134

Results:

Vacuum degassing of up to 4 million tonnes of steel per year (half of total steel production at BOF No.2). Treatment of high-quality alloyed, carbon, low-carbon, extra-low carbon steel grades.

USD rate:29,3874

Investment, RUB billion (with VAT):3.9

Lipetsk site

Hot rolling operations – Upgrade of finishing mill equipment with installation of HAGCs at stands Nos. 6, 7, 8, 9; work roll bending and shifting systems at stands Nos. 7, 11, 12

Investment, USD million (with VAT):46

Results:

Increase in production of hot-rolled steel; improved quality of rolled product.

USD rate:29,3874

Investment, RUB billion (with VAT):1.3

Lipetsk site

Hot rolling operations - Reconstruction of reheating furnace No. 3

Investment, USD million (with VAT):63

Results:

Increase in furnace productivity to 320 tonnes per hour; decrease in specific fuel consumption by 29.5 kg (of reference fuel)/tonne; decrease in metal losses by 6.7 kg/tonne.

USD rate:29,3874

Investment, RUB billion (with VAT):1.8

NLMK Clabecq

Quenching and tempering line (Q&T)

Investment, USD million (with VAT):139

Results:

Increase in high value added product output.

USD rate:1,3931

Investment, RUB billion (with VAT):100.0

Stoilensky.

Reconstruction and upgrade of medium and fine crushing stage

Investment, USD million (with VAT):48

Results:

Iron ore crushing capacity expansion and efficiency improvement.

USD rate:29,3874

Investment, RUB billion (with VAT):1.4

2012 year

Lipetsk site

BOF Shop No.1 - Construction of two one-position ladle furnaces

Investment, USD million (with VAT):86

Results:

Increase in shop productivity by 200,000 tonnes of steel per year. Expansion of product mix.

USD rate:31,0930

Investment, RUB billion (with VAT):2.7

Lipetsk site

BOF Shop No.2 - Construction of pig iron desulfurization unit No. 2

Investment, USD million (with VAT):49

Results:

Desulfurization of pig iron in the amount of 3.8 million tonnes per year.

USD rate:31,0930

Investment, RUB billion (with VAT):1.5

Lipetsk site

Refractory shop – Construction of roasting furnace

Investment, USD million (with VAT):64

Results:

Increase in limestone production by 256,000 tonnes per year; decrease in specific energy consumption.

USD rate:31,0930

Investment, RUB billion (with VAT):2.0

NLMK Dansteel

Reconstruction of rolling mill

Investment, USD million (with VAT):129

Results:

Increase in high value added product output.

USD rate:1,2859

Investment, RUB billion (with VAT):100.0

Stoilensky

Construction of 4th section of beneficiation plant

Investment, USD million (with VAT):170

Results:

Increase in iron ore production capacity in the amount of 4 million tonnes per year (with 66.3% Fe content)

USD rate:31,0930

Investment, RUB billion (with VAT):5.3

2013 year

Lipetsk site

Sintering operations – Reconstruction of central aspiration system No.2

Investment, USD million (with VAT):39

Results:

Decrease in air emissions and improved working conditions. Reconstruction of central aspiration system No.2 ensured treatment of 3.0 million m³ of dusted air.

USD rate:31,8480

Investment, RUB billion (with VAT):1.3

Lipetsk site

Dynamo steel production – Reconstruction of thermal treatment and coating line No. 5 for nitriding electrical anisotropic steel

Investment, USD million (with VAT):50

Results:

The line ensures decarburizing and nitriding of steel in the process of manufacturing nano-structured high-permeability electrical steel.

USD rate:31,8480

Investment, RUB billion (with VAT):1.6

Lipetsk site

BF Shop No.1 Pulverized coal injection system for Blast furnace No.5

Investment, USD million (with VAT):85

Results:

Decrease in coke and natural gas consumption; decrease in pig iron production cost.

USD rate:31,8480

Investment, RUB billion (with VAT):2.7

NLMK Russia Long

Launch of NLMK Kaluga

Investment, USD million (with VAT):1193

Results:

Expansion of steelmaking capacity by 1.5 million tonnes per year; and of long steel production capacity by 0.9 million tonnes per year.

USD rate:31,8480

Investment, RUB billion (with VAT):38

NLMK Russia Long

Vtorchermet NLMK. Opening of Podolsk site

Investment, USD million (with VAT):28

Results:

Increase in self-sufficiency in scrap with high bulk density through organizing a production treatment site equipped with a shredder in Podolsk with a capacity of up to 300,000 tonnes per year.

USD rate:31,8480

Investment, RUB billion (with VAT):0.9

Stoilensky

Mine expansion to 32 million tonnes

Investment, USD million (with VAT):126

Results:

Expansion of iron ore mining capacity.

USD rate:31,8480

Investment, RUB billion (with VAT):4

Stoilensky

Development of mining transportation system

Investment, USD million (with VAT):35

Results:

Improved efficiency of internal logistics

USD rate:31,8480

Investment, RUB billion (with VAT):1.1

2014 year

Lipetsk site

BF Shop No.1 - Pulverized coal injection system for Blast furnace No.4

Investment, USD million (with VAT):29

Results:

Decrease in coke and natural gas consumption; decrease in pig iron production cost.

USD rate:38,4217

Investment, RUB billion (with VAT):1.1

Lipetsk site

Coke and chemical operations - Installation of a biochemical waste water treatment facility

Investment, USD million (with VAT):57

Results:

Improvement in the quality of waste water treatment at coke and chemical operations; decrease in phenol, ammonia, hydrogen sulphide and hydrogen cyanide emissions. Unit productivity: 160 m³ per hour.

USD rate:38,4217

Investment, RUB billion (with VAT):2.2

Lipetsk site

Hot rolling operations – Technical upgrade of Mill 2000 roll-out table with a roll drive control system and an accelerated cooling system (Stage 1)

Investment, USD million (with VAT):22

Results:

Increase in production of hot-rolled steel by 45,000 tonnes per year; increase in product quality.

USD rate:38,4217

Investment, RUB billion (with VAT):0.9

Lipetsk site

Cogeneration plant - Replacement of 50 MW turbogenerator No. 4

Investment, USD million (with VAT):33

Results:

Existing level of energy generation at the plant maintained; increase in reliability of energy supply.

USD rate:38,4217

Investment, RUB billion (with VAT):1.3

Lipetsk site

Cold rolling and coating operations – Reconstruction of bell-type furnace area (Stage 1)

Investment, USD million (with VAT):19

Results:

Increase in productivity of bell-type furnaces; increase in the quality of products; decrease in energy and operating costs.

USD rate:38,4217

Investment, RUB billion (with VAT):0.7

Lipetsk site

Oxygen shop - Construction of air separation unit No. 16

Investment, USD million (with VAT):39

Results:

Ensure a supply of air separation products to plant operations given the increase in steel product output and expected decommissioning of worn-out air-separation units.

USD rate:38,4217

Investment, RUB billion (with VAT):1.5

NLMK Russia Long

NSMMZ – Reconstruction of gas purification system at EAF shops 1,2 - Stage 1

Investment, USD million (with VAT):10

Results:

Improved of sanitary environmental situation at work places and at the border of the NSMMZ site in Revda sanitary protection zone.

USD rate:38,4217

Investment, RUB billion (with VAT):0.4

2015 year

Lipetsk site

BF Shop No.1 - Pulverized coal injection system for Blast furnace No.4

Investment, USD million (with VAT):14

Results:

Ensure a supply of air separation products to plant operations given the increase in steel product output and expected decommissioning of worn-out air-separation units.

USD rate:57,4231

Investment, RUB billion (with VAT):0.8

Lipetsk site

Sintering operations – Reconstruction of lime feed tract aspiration units

Investment, USD million (with VAT):6

Results:

Decrease in dust emissions by 250 t per year; improved working conditions.

USD rate:57,4231

Investment, RUB billion (with VAT):0.4

Lipetsk site

Refractory shop – Construction of central gas treatment system for shart furnaces Nos. 1-3

Investment, USD million (with VAT):5

Results:

Decrease in dust emissions by 80 t per year; improved working conditions.

USD rate:57,4231

Investment, RUB billion (with VAT):0.3

Lipetsk site

Refractory shop – Reconstruction of bulk material handling tract aspiration units at are No. 3 with replacement by bag filters

Investment, USD million (with VAT):4

Results:

Decrease in dust emissions by 150 t per year; improved working conditions.

USD rate:57,4231

Investment, RUB billion (with VAT):0.2

Lipetsk site

Cold rolling and coating operations - Reconstruction of bell-type furnace area (Stage II)

Investment, USD million (with VAT):8

Results:

Increase in productivity of bell-type furnaces; increase in the quality of products; decrease in energy and operating costs.

USD rate:57,4231

Investment, RUB billion (with VAT):0.5

Lipetsk site

Sintering operations – Replacement of GST-81 screens by Schenck screens

Investment, USD million (with VAT):5

Results:

Increase in sinter quality; decrease in pig iron production cost by using screens with improved design.

USD rate:57,4231

Investment, RUB billion (with VAT):0.3

Lipetsk site

Steelmaking slag preparation shop - Construction of BF slag handling area

Investment, USD million (with VAT):7

Results:

Decrease in hydrogen sulphide emissions. Maximum allowed concentration level achieved at sanitary protection zone border.

USD rate:57,4231

Investment, RUB billion (with VAT):0.4

Capex, $ mln

    2000     2001     2002     2003     2004     2005     2006     2007
    173     141     154     239     269     580     619     958
    2008     2009    2010     2011     2012     2013     2014 2015   
    1934     1121     1463     2048     1453     756     563     595