11 February 2015

NLMK significantly improves environmental performance

NLMK Group (LSE: NLMK) successfully improved the level of off-gas treatment to a record 98.7% and reduced air emissions at its main production site in Lipetsk (Novolipetsk) during 2014 as its Environmental Programme 2020 gains momentum.

The decrease in emissions in 2014 from 22.3 to 22.09 kg per tonne of steel was achieved in parallel to a steel output of 12.56 million tonnes; a record over the 80 years of NLMK’s history. New performance records were set for every production stage at Novolipetsk.

The company has invested over 25 billion rubles into environmental initiatives since 2000, almost halving its key atmospheric impact figures and swiftly approaching best available technologies.

Yuri Larin, NLMK Group Vice President, Technology Development & Operational Efficiency, said:

“NLMK and Novolipetsk continue the confident strides toward reducing our environmental footprint through our Environmental Programme 2020. In 2014, the company implemented a range of environmental initiatives that not only mitigated the impact of expanded operations, but further reduced it. For example, air emissions were reduced by 68 tonnes when compared to 2013; and a record off-gas treatment level was achieved.”

Novolipetsk implemented or launched several Environmental Programme 2020 projects in 2014. For instance, testing of an innovative waste water treatment facility began at coke and chemical operations, among the benefits of which is a reduction in air emissions. De-dusting facilities in three shops were equipped with 790 new high-performance filter sleeves. An upgrade of the dust collection system was completed at the refractory shop in December 2014, reducing residual dust content in off-gases ten-fold.

Construction of a new BF slag treatment facility began. This project will minimize hydrogen sulphide emissions. Reconstruction of the gas suppression system in the outdoor storage of bulk materials began at the Refractory Shop. This will reduce limestone dust emissions by 72 tonnes per year. Work continued on a joint project with Siemens VAI on a major upgrade of both gas exhaust equipment and emission collection and cleaning systems at Novolipetsk BOF operations that will allow specific air emissions from BOF operations to be halved.

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. Steel production volume at 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; expand product mix significantly; and reduce the environmental footprint of the site.

NLMK is making ongoing efforts to increase productivity and energy efficiency. In 2013, specific energy consumption per tonne of steel totaled 5.67 Gcal, a 20% improvement compared to 2000. This brought NLMK closer to the level of best available technologies (5.4 Gcal/t).

About the Environmental Programme

During Stage 2 of its Technical Upgrade Programme (from 2007 to 2012), the Group invested over 21 billion rubles in environmental projects. NLMK Group invested a total of 258 billion rubles in upgrades and new capacities, including RUB 7.5 billion invested in environmentally-friendly technologies at NLMK’s new-generation plant, NLMK Kaluga, launched in July 2013. Over the period, steel output at NLMK Group’s Russian sites increased by 52% to 14.2 million tonnes.

Specific air emissions decreased by 40% (from 37.5 to 22.6 kg per tonne of steel), and waste water discharge was reduced by 54 times (from 1.08 to 0.02 kg/t). Waste water discharge at the Lipetsk site has been completely eliminated.

In May 2014, NLMK Group announced the new stage of its Environmental Programme leading up to 2020 (Environmental Programme 2020). This programme is part of the Group’s development strategy and investment programme. It is aimed at further minimizing our environmental footprint and achieving the best possible environmental standards in global steel production. Investment in environmental initiatives and projects at NLMK Group companies will total RUB 10.6 billion. Most of the funds will be invested at NLMK’s Lipetsk production site. By 2020, the Programme will allow NLMK to reach the best global environmental standards. Specific air emissions will be approaching the level of global best available technologies; there will be zero waste water discharge at all Group sites; waste recycling will grow five-fold; and the slag heap at the Lipetsk site will be reclaimed.

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).


Maria Simonova

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