21 January 2011 NLMK Group

NLMK wins bid to develop Usinsk coal deposit #3 in Komi Republic

NLMK has won the right to develop the third mining area in the Usinsk coal deposit (Usinks-3) located in the north of the Komi Republic. NLMK was selected following a competition organized by the Subsoil Agency of the Komi Republic. The license fee is RUR900 million. The license granting the right to develop the mine is expected to be obtained within two months.

The Usinsk deposit is located in the north-western part of the Pechora coal province, 45 km south-west of the Vorkuta deposit in the territory of the Komi Republic. The Kyk-Shor railway station is located within the field boundaries, 56 km from Vorkuta.

The Usinsk-3 deposit has over 227 million tonnes of on-balance reserves of high-quality hard coking coal (grades Zh and KZh, Russian categories of reserves C1+C2). Within the next seven years, NLMK plans to complete geological exploration activities, draw up a technical design for the commercial development of the deposit and launch the construction of a mining facility. Mine commissioning is planned for 2016, reaching the design capacity of approximately 4.5 million tonnes in 2018. As part of the development, approximately 3 km of railway line will be constructed, connecting the facility to Kyk-Shor station.

Alexey Lapshin, President of NLMK, said:
“This step is completely in line with our strategy aimed at enhancing the long-term efficiency and sustainability of our business by increasing integration into the production of high-quality raw materials.”

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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 9M 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.