15 June 2015 Novolipetsk

NLMK Group building recycling facility at Lipetsk site to process iron waste into briquettes

NLMK Group building recycling facility at Lipetsk site to process iron waste into briquettes
NLMK Group (LSE: NLMK), Russia’s top steel-producing company and one of the most efficient steel companies in the world has received an approval from the State commission and a permit for the construction of a facility with an annual capacity of 700,000 tonnes of metallurgical briquettes from iron-containing waste at the company’s Lipetsk site.

Iron-containing briquettes are a raw material for the smelting of hot metal. The briquettes will be manufactured using a hard extrusion method from a mix of iron ore concentrate and blast furnace sludge, i.e. iron-containing waste formed in the process of wet blast furnace gas cleaning. The production of briquettes is an environmentally friendly technology that does not generate any dust or gas emissions.

The launch of the plant will enable more than 350,000 tonnes of blast furnace waste to be recycled each year. NLMK will cease to accumulate sludge and will begin to process existing iron containing waste stocks.

Konstantin Lagutin, Vice President for Investment Projects, said: ‘Construction of a facility to manufacture metallurgical briquettes is a Strategy 2017 project aimed at boosting the efficiency of production processes through recycling and utilizing production waste as a proper raw material. The new facility will not only increase the efficiency of iron extraction, but will significantly reduce the plant’s environmental footprint. We also plan to fully liquidate existing blast furnace sludge piles, which total approximately 3.5 million tonnes of waste accumulated since Soviet times, by 2030.’

Detailed engineering has begun as part of the briquetting plant construction project and is due for completion by the end of the year. Facility launch is scheduled for 2017.

Investment in the project will total approximately 2.3 billion rubles. The economic effect of EBITDA is 25 million dollars per year; the pay-back period is approximately 2.5 years.

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).

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 12.56 million tonnes in 2014. 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 1.3% compared to 2013.