7 October 2014

NLMK and Siemens VAI implement large-scale environmental project at Novolipetsk

NLMK Group, Russia’s leading manufacturer of high value added steel products, has concluded a contract with Siemens VAI for undertaking the main works as part of a large-scale project of upgrading both gas exhaust equipment and emission collection and cleaning systems at the Novolipetsk BOF operations.

Under the terms of the contract Siemens VAI will be responsible for engineering works and for the supply of the technological hardware required for the construction of a secondary emissions collection and cleaning system, as well as for the replacement of the gas exhaust ducts of two BOFs that have a joint capacity of 5.23 million tonnes per year. Siemen VAI will also supervise equipment assembly and start-up.

The new solutions will provide a 12% increase in the productivity of the Novolipetsk BOF Shop and reduce its air emissions by more than 50%. They also provide the possibility of generating energy from BOF gases.

Construction and assembly activities related to the project are planned to begin in June 2016. The project is scheduled for completion in 2019.

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

“NLMK is implementing this large-scale project as part of its Strategy 2017 and its Environmental Programme 2020, aimed at enhancing production efficiency, occupational health and safety, and at radically reducing the environmental footprint of operations. Replacing the existing facilities with modern and automated technological systems will really boost the reliability and environmental friendliness of NLMK’s BOF operations.”

NLMK Group has implemented a number of joint hi-tech projects with Siemens VAI to date. These include the reconstruction of gas exhaust ducts at the first BOF shop; the reconstruction of three Continuous Casting Machines and the complex of BOF #1 in the second BOF shop; and the construction of 4 ladle furnaces. Siemens VAI is also involved in the construction of the Pelletizing Plant at Stoilensky.

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.

Currently, the steel production volume of the Lipetsk site is in excess of 12 million tonnes per year, or approximately 18% of all steel produced in Russia, and approximately 80% of all steel products produced by NLMK Group.

Since 2000, Novolipetsk has invested over RUB 200 billion into facility upgrades allowing it to double production volumes, enhance productivity, to expand product mix significantly and to improve the environmental footprint of the site. Accordingly, Novolipetsk has completely halted waste water discharge; reduced specific air emissions two-fold; and began elimination of the previously accumulated solid waste.

In May 2014, NLMK Group announced a new stage of its Environmental Programme leading up to 2020 (Environmental Programme 2020). This programme of part of the Group’s investment strategy and investment programme, aimed at further minimizing environmental footprint and achieving the best environmental standards in global steelmaking. Total investment in NLMK Group’s environmental initiatives and projects will be RUB 10.6 billion, with the bulk being invested at NLMK’s production site in Lipetsk.

About NLMK Group

NLMK Group is one of the leading steelmakers in the world, and the largest steel producer in Russia.

NLMK’s production facilities are located in Russia, Europe and the USA. The Company’s crude steel capacity is over 17 million tonnes per year, of which approximately 16 million tonnes are located in Russia. NLMK has modern production capacities that are on par with leading international manufacturers in terms of technology.

The Group’s vertical integration allows for control of the entire production chain, from mining to final processing and delivery to our customers.

The Group produces a wide range of flat and long steel products. NLMK is the world-leading supplier of slabs and transformer steel, and the largest Russian supplier of HVA products, including pre-painted steel, galvanized steel and electrical steel, as well as long products.

The Company has a diversified sales topography, delivering products to over 70 countries around the world.

NLMK has the most competitive cash cost among global manufacturers; and one of the highest profitability levels in the sector. The Company generated $10.9 billion in revenue and $1.5 billion in EBITDA in 2013.

NLMK is the only steelmaker in Russia with an investment grade credit rating from international rating agencies. It is included in the TOP10 for corporate governance and transparency among Russian public companies by international rating companies.

NLMK’s ordinary shares are traded on the Moscow Stock Exchange (ticker “NLMK”) and its global depositary shares on the London Stock Exchange (ticker “NLMK:LI”).