12 March 2015 Novolipetsk

NLMK Group increases use of secondary energy sources at Novolipetsk

NLMK Group increases use of secondary energy sources at Novolipetsk
NLMK Group (LSE: NLMK), Russia’s leading manufacturer of high value added steel products, has begun hot testing of a new ‘green energy’ top-pressure recovery turbine (TRT) facility at its Lipetsk production site. Another turbine is under construction in parallel, with launch scheduled for 2016.

TRT’s are used to generate energy through the channeling of excess blast furnace gas pressure. To date, blast furnace gas was directed to the heat power plant and the recovery cogeneration plant for energy generation; but the potential of excess blast furnace gas pressure had not been harnessed.

The total design capacity of the two turbines that form the TRT complex is 28 MW. The TRT facility will receive gas from blast furnaces No. 6 and 7, with the project increasing the plant’s energy self-sufficiency from 54% to 56%; and reducing the amount of energy that must be purchased for the plant by 200 million kWh per year, which accounts for approximately 6% of total purchased energy.

Investment in the TRT project totals around 1.9 billion rubles; resulting in a payback period of about 18 months.

NLMK Vice President for Energy Alexander Starchenko said: “TRT energy generation is ‘green’ because the process of energy generation does not require the burning of fuel, but rather secondary resources are used. The project will not only cut our energy costs but also improve our environmental footprint. Efficient use of the potential that already exists within our production environment and a high level of sustainability are key goals of NLMK Group’s development strategy that we are ever striving towards.”

Over the last three years, NLMK Group has implemented a number of large investment projects aimed at increasing the energy efficiency of operations and increasing the share of electric energy generated using by-products. An example is the new 150 MW recovery cogeneration plant installed at the Lipetsk site. It was constructed along with a modern electric air-blowing station installed to meet the needs of blast furnaces 6 and 7. NLMK also built a modern air separation unit that produces 34,000 cubic meters of oxygen per hour.

VIZ-Steel (Yekaterinburg) launched an air separation unit to produce nitrogen with a capacity of 8,000 cubic meters per hour.

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 history of the plant began 80 years ago with the launch of the first blast furnace. Since then, the plant has progressed significantly from a single blast furnace to a global steelmaking company.

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.

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, with capacities running at 100%. Production grew by 1.3% compared to 2013. This record performance was supported by productivity improvements throughout the value chain of the site.

About NLMK Group

NLMK Group is the largest steelmaker in Russia and one of the most efficient in the world. NLMK’s high-quality 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 $5.4 billion in revenue, $1.1 billion in EBITDA, and $332 million in net profit in H1 2014.

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).