News

22 April 2011 NLMK Group

NLMK adds new deposit to its upstream development pipeline

NLMK (LSE: NLMK) has won the right to explore and develop the Zhernovki Gluboki plot of the Zhernovskoye coal deposit located in the Kemerovo region, Siberia, located just below the Zhernovskoe-1 deposit already owned by NLMK. The license fee is RUR420 million. The 13.5 sq km plot has 73 million tonnes of on-balance reserves of high-quality hard coking coal (grade Zh, Russian categories of reserves B+C1). It is located in the territory of the Novokuznetsk and Prokopjevsk regions. It has exit to the surface and is located below the Zhernovskoye-1 plot that NLMK already holds a license for. In 2005 NLMK won the bid to develop Zhernovskoye-1 with an adjusted on-balance reserve of grade Zh, GZh, GZhO coals of 163 million tonnes. As part of its development program, NLMK plans to invest over RUR1 billion to design and prepare the construction of the Zhernovski Mining and Beneficiation Plant in 2011. Development of the two plots (Zhernovski Gluboki and Zhernovski-1) in a single scheme (the Zhernovski Mining and Beneficiation Plant) will allow to share costs for the construction of a common infrastructure using best available technologies compliant with all modern security requirements, enhance production capacities, and improve technical and economic performance of the operations. Moreover, integrating newly acquired reserves will substantially improve a mine life of the deposit. The project to develop the Zhernovski Mining and Beneficiation Plant is in line with NLMKs strategy aimed at enhancing the long-term efficiency and sustainability of its business by increasing integration into the production of high-quality raw materials. About NLMK NLMK is one of the world’s leading producers of steel, with 2010 output of over 11.5 million tonnes. As of the end of 2010 the key production facilities located in Russia, the EU and USA employed around 59,000 people. The Company produces a wide range of steel products, including slabs and billets, hot‐rolled, thick hot‐rolled plates, cold‐rolled, galvanized and electrical steel (transformer grain‐oriented steel and dynamo steel), as well as rebar, wire‐rod and metalware. NLMK delivers its products to customers from over 70 countries. NLMK shares are traded in Russia on MICEX and RTS, and GDRs – on the London Stock Exchange. In January 2011 NLMK won the right to develop the third mining area in the Usinsk coal deposit (Usinsk-3) located in the north of the Komi Republic. The Usinsk-3 deposit has over 227 million tonnes of on-balance reserves of high-quality hard coking coal (grades 2Zh and KZh).