News

3 March 2016

NLMK Group to upgrade its BF operations in 2018

NLMK Group, an international steel company with assets in Russia, the USA and the EU, has signed an agreement with Paul Wurth (Luxembourg) for engineering and the supply of equipment for the reconstruction of blast furnace No.6 (BF-6), which has a capacity of 3.2 million tonnes per year, at its production site in Lipetsk.

The upgrade, planned to begin in Q1 2018, will extend the service life of the blast furnace by at least 20 years; and boost its productivity by 8% to 3.4 million tonnes of pig iron per year.

Konstantin Lagutin, NLMK Group Vice President for Investment Projects, said:

“This project is part of the programme we announced previously aimed at upgrading and enhancing the reliability of our equipment. At the same time, it will have a substantial economic effect. The upgrade will result in a blast furnace that is greener, more productive, and more efficient in terms of its consumption rates.  Reconstruction of the blast furnace dedusting systems will provide a six-fold increase the efficiency of air treatment, and achieve a level of performance that is among the best in the global steel industry.”

At the beginning of 2018, as part of the large-scale reconstruction, BF-6 will be dismantled right down to its foundations and then completely rebuilt within a period of 135 days. Auxiliary facilities will also be upgraded, including the stoves; the dedusting system at the casting yard and trestle; and the blast furnace cooling system.

Advanced technical solutions will be implemented to boost the productivity of the equipment:

·         Use of thin copper plate coolers will increase the blast furnace’s useful volume by 10%.

·         A new furnace gas treatment system will enable the use of excess gas pressure for energy generation at the top-pressure recovery turbine (TRT), a new green energy generating facility.

·         A new, highly-efficient steam blower will supply a sufficient amount of cold blast to BF-6 using the energy of utilized steam.

·         Dedusting systems at the casting yard and the trestle will be upgraded, providing a six-fold reduction in emissions and bringing this indicator down for all of Novolipetsk blast furnace operations by over 20%. Once the reconstruction is completed in mid-2018, dedusting performance will increase six-fold to deliver a new low of 5 mg/m3.

The capex of the BF-6 upgrade project, which is part of Strategy 2017, is estimated at RUB 7.5 billion.

Novolipetsk currently operates five blast furnaces: BF-3 (production capacity of 1.6 million tonnes of pig iron per year); BF-4 (production capacity of 2 million tonnes of pig iron per year); BF-5 (production capacity of 2.8 million tonnes of pig iron per year); and BF-7 (production capacity of 4.2 million tonnes of pig iron per year). Blast furnace No. 7 is the first and only blast furnace built in a post-Soviet country. Blast furnace No. 7 was built using the most advanced, innovative technical solutions developed by leading Russian and international engineering companies. The entire production process is based on the best available environmental and resource efficient technologies, including highly efficient dust collection and closed loop water systems.

About NLMK Group

NLMK Group is the largest steelmaker in Russia and one of the most efficient in the world.  NLMK’s metal products are used in various industries, from construction and engineering to the manufacture of power-generating equipment and offshore wind turbines.

NLMK's production assets are located in Russia, Europe, and the United States. The Company’s liquid steel production capacity is over 17 million tonnes per year, of which about 16 million tonnes are produced in Russia.

NLMK has the most competitive cash cost among global manufacturers; and one of the highest profitability levels in the sector. The company generated $6.37 billion in revenue; $1.63 billion in EBITDA; and a net profit of $891 million in 9M 2015. Net Debt/EBITDA is 0.5.

NLMK’s ordinary shares are traded on the Moscow Stock Exchange (ticker symbol: NLMK), and its global depositary shares are traded on the London Stock Exchange (ticker symbol: NLMK:LI). The company has a BBB- credit rating.

About Novolipetsk (NLMK’s main production site in Lipetsk)

Novolipetsk is the main production site of NLMK Group, Russia’s leading manufacturer of steel and high value added rolled products, and one of the most efficient steelmaking companies in the world. Novolipetsk is the nucleus of NLMK Group’s single production chain, with assets in Russia, the EU and the USA.

The steel production volume of the Lipetsk site is approximately 18% of all steel produced in Russia, and approximately 80% of all steel products produced by NLMK Group. Novolipetsk’s high-quality steel products are used in various strategically important industries, from construction and engineering to the manufacture of power-generating equipment and large-diameter pipes.

Novolipetsk produced 12.9 million tonnes in 2015. This represents an all-time high over the 80 years of NLMK’s history. This record performance was supported by productivity improvements throughout the value chain of the site. With capacities running at 100%, production grew by 2.4% compared to 2014.

For more information about NLMK Group, please visit www.nlmk.com