16 July 2015 Novolipetsk

NLMK Group boosts stability of energy generation at Novolipetsk

NLMK Group boosts stability of energy generation at Novolipetsk
NLMK Group (LSE: NLMK), Russia’s top steel-producing company and one of the most efficient steel companies in the world, has begun the replacement of turbo generator #5 at the Lipetsk site co-generation plant.

Installation of the latest technology in place of the existing obsolete hardware will boost equipment reliability and increase the generator’s operating capacity by 10% to 60 MW. NLMK’s gross installed captive generation capacity is 502 MW; with energy self-sufficiency totaling 54% of consumption.

An agreement for engineering and supply of the main process equipment has been executed with the Urals Turbine Plant. Construction and assembly works are scheduled for 2016; whilst launch is planned for 2017.

Investment in the project will total approximately 1.9 billion rubles; with a payback period of 1.4 years.

Alexander Starchenko, NLMK Vice President for Energy, said: ‘This new project is another step towards increasing the efficiency of NLMK’s energy complex. It will help ensure a reliable supply of energy for steelmaking operations; and maximize the use of by-product blast furnace gas as fuel.’

The resulting reduction in energy generation during the course of the project will be offset by redistribution of the capacities of other energy-generation units, including NLMK’s two new top-pressure recovery turbines. The first top-pressure recovery turbine was launched in June 2015, with the second coming online in 2016.

There are eleven generation facilities spread across two co-generation plants at the Lipetsk site, which have a capacity of 332 MW and 150 MW respectively; and one 20 MW top-pressure recovery turbine. Co-generation plants run on natural gas as well as by-product blast furnace, coke and chemical gases.

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 $10.4 billion in revenue; $2.4 billion in EBITDA; and a net profit of $845 million in 2014.

NLMK’s ordinary shares are traded on the Moscow Stock Exchange (MICEX-RTS, ticker symbol: NLMK), and its global depositary shares are traded on the London Stock Exchange (ticker symbol: NLMK:LI).