If interested, a potential contractor may, prior to the accreditation stage, send the following information by email to sp-dzu@nlmk.com:
Climate Risks
NLMK Group has analysed almost 200 risks and opportunities as classified by TCFD categories and prioritized them through identifying the most significant ones.
Among transitional risks, six were identified as most significant for the period of 2022–2030 and subject to further in-depth study:
- Introduction of carbon tariffs on product imports into the EU
- Introduction of carbon tariffs on product imports into the U.S.
- Introduction of a tax on greenhouse gas emissions in Russia
- Global decrease in steel demand
- Increased competitiveness of EAF vs. the BF–BOF chain
- Tightening of the green legislation in the EU
The Company estimates that its climate risks levels, both transitional and physical, indicate the Group’s high resilience to climate change. The Group has developed adaptation measures that significantly reduce its exposure in the medium to long term.
Significant risks and opportunities due to climate change
Timeframe
for short-term
for medium-term
for long-term
Financial evaluation of the risk
below $20 million
$20-100 million
over $100 million
Low-carbon economy transition risks
Regulatory risks
Description
For a proper financial assessment of this risk, the introduction of a European Carbon Border Adjustment Mechanism (CBAM) was considered together with the introduction of national carbon regulations, as the taxable base is the difference between the Russian carbon tax and the price under the European Greenhouse Gas Emissions Trading System (EU ETS)
Financial implications
Increase in operating expenses
Management of risks and opportunities
Products carbon footprint reduction, implementation of projects aimed at reducing emissions, development of mid-term and long-term climate strategies
Description
The introduction of carbon regulation in the U.S. will increase the Company’s costs and make supply of slabs to its US assets unprofitable. The assessment includes concurrent introduction of national carbon regulation.
Financial implications
Increase in operating expenses
Management of risks and opportunities
Reduction of the product carbon footprint Construction of new HBI-based steelmaking capacity. The cost of actions taken to manage the risk is assumed as the total CAPEX value for the upgrade of the operations at Stoilensky.
Description
The risk is related to the tightening of carbon regulations in the EU, which will precipitate a rise in the site operating costs.
Financial implications
Increase in operating expenses
Management of risks and opportunities
A climate strategy for the Group’s European sites is being developed that includes reductions of CO2 emissions. A CO2 purchasing strategy has been developed for NLMK Europe that accounts for the Company needs and the market volatility.
Market risks
Description
The gap between GDP growth and steel demand growth is caused by improvements in material efficiency and leads to lower sales of semi-finished, hot-rolled and long products, as well as high value-added products. This could result in foregone profits for NLMK.
Financial implications
Decline in revenues due to lower product demand
Management of risks and opportunities
Both the projects to increase capacity and individual projects aimed at cost-cutting and new product launches improve the competitiveness of NLMK’s steel and enhance its quality, as well as diversify its product mix, which reduces exposure to risk. The cost to manage this risk is assumed as the value invested in the above projects.
Technology risks
Description
Development of green steel production technologies may lead to the devaluation of capital expenditures on the upgrades of the BF-BOF chain.
Financial implications
Decline in revenues due to lower product demand
Management of risks and opportunities
The upgrade of metals and mining operations at Stoilensky will increase the added value of products by replacing pig iron and scrap with HBI. The cost of actions taken to manage the risk is assumed as the total CAPEX value for the upgrade of mining operations at Stoilensky.
Physical risks
Technology risks
Description
Frequency and severity of extreme weather events, such as floods, hurricanes, forest fires, droughts, and heat waves will increase in the scenarios that assume temperature growth.
Financial implications
Losses due to damage to buildings and structures Decrease in revenue as a result of logistical issues
Management of risks and opportunities
Building a system for monitoring of incidents caused by weather and climate Deployment of automated weather stations Monitoring the condition of facilities and taking proactive measures to protect them from weather and climate factors Redundancy in logistical chains.
Description
One of the most evident consequences of climate change is the increase in average temperatures. Furthermore, if certain climate scenarios materialize, the risks of changes in the precipitation patterns and water availability emerge. Likewise, increased atmospheric temperatures might lead to a globally rising sea level and flooding of coastal territories.
Financial implications
Growth of operating costs Growth of capital expenditures (e.g., restoration of assets) Increased insurance premiums and potentially lower availability of asset insurance in “high-risk” zones
Management of risks and opportunities
Regular monitoring of the condition of buildings and structures Adaptation measures aimed at staff, equipment and buildings.
Opportunities
Description
Investing in HBI to reduce dependence on scrap. HBI is a low-carbon raw material for steelmaking. The need to reduce CO2 emissions is driving the global demand for HBI. HBI has high added value since it replaces pig iron and scrap. Moreover, when clean hydrogen and electricity become available at affordable prices and in sufficient quantities, it will be possible to produce steel with a very low carbon footprint.
Financial implications
Return on investment in low-carbon technologies
Management of risks and opportunities
Exploring options for building a new mining and steel-making production facility that incorporates the latest and most environmentally sustainable technologies, including the production of hot briquetted iron (HBI), a new product for our company.
Description
Success of the CO2 utilization programme. The opportunity for NLMK to successfully implement its proposed CO2 utilisation programme will result in savings on a potential future carbon tax.
Financial implications
Reduction of direct costs
Management of risks and opportunities
The Company is investigating the feasibility of implementing CCUS projects together with its partners. The key issue is carbon dioxide utilisation. The Company considers several options for CO2 utilisation, including selling commodity CO2 and its derivatives or disposal in deep wells.
Description
Opportunity for NLMK to use carbon credits to finance low-carbon initiatives.
Financial implications
Optimization of investment
Management of risks and opportunities
Strategy is under development
Scenarios used as inputs for climate risk assessment
Paris Agreement scenario
The scenario assumes a quick decarbonisation in line with the Paris Agreement, which aims to keep global warming to well below 2°С vs. the pre-industrial age, with a probability of 66%. This scenario is believed to ensure the transition to a low-carbon economy with zero emissions in the second half of the 21st century. Like most low-carbon transition scenarios, this option requires significant emission reductions by 2100 in order to keep global warming below 2°C
IPCC Climate Scenario
Representative Concentration Pathway (RCP 2.6)
Global mean temperature rise by 2050*
1.6 ± 0.3°C
Social and economic development scenario
Shared Socioeconomic Pathway SSP 1: Sustainable development
Increase in global average temperature by 2100*
1.6 ± 0.4°C
Global GHG emissions in 2050 Mt of CO2-equivalent
25,000
–50% from 2015
* Temperature anomalies vs. the pre-industrial period of the 1850s–1900s
Business-as-usual scenario
An intermediate scenario, which assumes a higher probability of temperatures exceeding 2°C, which will lead to significant consequences for global climate systems. This scenario considers the current climate and energy policies, including commitments made as part of national plans to reduce emissions and adapt to climate change (Nationally Determined Contributions, NDCs). This scenario assumes a significant decarbonization in the second half of the 21st century.
IPCC Climate Scenario
Representative Concentration Pathway (RCP 4.5)
Global mean temperature rise by 2050*
2.0 ± 0.3°C
Social and economic development scenario
Shared Socioeconomic Pathway SSP 2: Median path
Increase in global average temperature by 2100*
2.4 ± 0.5°C
Global GHG emissions in 2050 Mt of CO2-equivalent
56,000
+13% from 2015
* Temperature anomalies vs. the pre-industrial period of the 1850s–1900s
Worst-case scenario
This scenario assumes that the existing climate and energy policies do not succeed. This will lead to a significant increase in global greenhouse gas emissions. Physical risks are expected to grow significantly in this scenario.
IPCC Climate Scenario
Representative Concentration Pathway (RCP 8.5)
Global mean temperature rise by 2050*
2.6 ± 0.4°C
Social and economic development scenario
Shared Socioeconomic Pathway SSP 5: Fossil fuel-based development
Increase in global average temperature by 2100*
4.3 ± 0.7°C
Global GHG emissions in 2050 Mt of CO2-equivalent
103,000
+109% from 2015
* Temperature anomalies vs. the pre-industrial period of the 1850s–1900s
What is NLMK procurement
What We Purchase
What We Purchase
The wide range of activities of the NLMK Group leads to a broad spectrum of requirements for internal customers and a diverse range of procured items. The Company’s Procurement Function includes both centralized and decentralized elements: this organizational structure allows us to ensure our procurement activities are carried out as efficiently as possible and facilitates prompt interaction with suppliers. Over 50 category strategies have been developed for centralized categories, ensuring reliable and uninterrupted procurement for the NLMK Group.
How Procurement is Conducted in the Company
How Procurement is Conducted in the Company
The activities of the NLMK Group’s Procurement Function are aimed at increasing process efficiency, implementing advanced practices and modern digital solutions in procurement, and building long-term partnerships to ensure maximum transparency and openness in supplier selection.
Timely and accurate provision of high-quality goods and services by suppliers and contractors directly affects the quality of products and the stability of production processes at NLMK Group.
Strong and mutually beneficial relationships with reliable suppliers and contractors are essential for stable operations and fulfilling the Group’s commitments.
Procurement Function Priorities
Procurement Function Priorities
The priorities of the Procurement Function are to ensure the reliable and uninterrupted supply of materials, services, and professional services for construction and installation work to the NLMK Group. The procurement process is built in such a way as to guarantee timeliness, accuracy, and high quality of procured goods and services, as well as maximum transparency and competitiveness.
Ethical and conscientious business conduct is a mandatory prerequisite for cooperation with the NLMK Group. Therefore all our partners must comply with the NLMK Supplier Code of Business Ethics.
For effective operation and ongoing improvement, the NLMK Group has adopted the Integrated Management System Policy. We also expect our counterparties to strictly comply with applicable legal requirements, including those related to environmental protection, industrial safety, and occupational health. We see the main goal of compliance as ensuring the safety of employees, contractors, and all residents of our regions of presence.
NLMK Group seeks to establish mutually beneficial partnerships based on open interaction to achieve unique results at NLMK sites, as well as to provide conditions for the continuous development of our partners.
NLMK Procurement Principles
- Competitiveness, openness, and objectivity in counterparty selection;
- Minimizing the risk of counterparties failing to meet their obligations (such as late or incomplete delivery, violation of quality requirements, etc.);
- Achieving optimal, fair market prices and the most favorable acquisition conditions for materials/services for NLMK Group companies in major procurement procedures, while minimizing the risk of legal consequences for NLMK Group companies;
- Shaping and strengthening the image of NLMK Group as a fair and open customer ready for cooperation, protecting its corporate interests through collective decision-making.
* Temperature anomalies vs. the pre-industrial period of the 1850s–1900s
How to become a partner
How to become a partner of NLMK Group: requirements and conditions of cooperation
To become a partner, you must:Fill Out the Self-Registration Form
1
Fill Out the Self-Registration Form
NLMK Group procures material resources/services only from accredited and qualified suppliers. You can complete the accreditation and qualification process in accordance with NLMK Group criteria only after filling out the self-registration form.
Pass the Qualification Selection
2
Pass the Qualification Selection
- Fill in the general qualification questionnaire template, which is sent after successful self-registration, and submit it for review. The result of the questionnaire review will be sent to the email indicated in the self-registration form;
- The partner receives category-specific questionnaires after successful accreditation;
- Fill out the category questionnaire templates for the product categories selected during self-registration;
- If comments arise during qualification, an additional supplier audit/on-site inspection may be carried out.
Stages of qualification selection:
- Accreditation
- Qualification for compliance with the Occupational health and safety rules for contractors, carriers and suppliers of goods with installation supervision services (in case of entry into the territory)
- Categorical qualifications
Participate in Procurement Procedures
3
Participate in Procurement Procedures
Submit a bid to participate in a closed tender after receiving an invitation by email or in an open one on the electronic trading platform. To do this, follow the link in the email, review the tender terms, and submit your proposal within the indicated deadlines.
Conclude an Agreement
4
Conclude an Agreement
Carry out the supply of materials/services. Priority is given to agreements executed in NLMK Group’s template form.
The conclusion and support of contracts is provided by LLC "Corporate Solutions Center" based on a services agreement between LLC "Corporate Solutions Center" and NLMK Group.
Take Part in Assessment and Audit
5
Take Part in Assessment and Audit
Submit a bid to participate in a closed tender after receiving an invitation by email or in an open one on the electronic trading platform. To do this, follow the link in the email, review the tender terms, and submit your proposal within the indicated deadlines.
Requirements for partners (Slider)
requirements-for-partners
Take Part in Assessment and Audit
Attention, Contractors!
- A presentation containing general information about the organization (company details, types of work performed, available resources and production capacities, valid licenses and permits);
- Experience in construction and installation work (indicating the term and type of work, customer and object name);
Following review of the submitted information, the potential contractor will receive feedback.
* Temperature anomalies vs. the pre-industrial period of the 1850s–1900s
Procurement rules
Procurement Rules
NLMK follows clear and transparent procurement procedures that ensure fairness and effectiveness in the selection of counterparties. Below are the key provisions regulating participation in tenders and cooperation with suppliers and contractors.
Financial obligations of counterparties
The counterparty independently bears all expenses associated with preparing and submitting a tender application. NLMK does not reimburse and bears no responsibility for these expenses, regardless of the tender results.
Tender application requirements
The tender application must include a commercial offer, prepared strictly according to the requirements specified in the tender documentation. Failure to comply with these requirements may result in the application being rejected.
Qualification requirements
Depending on the procurement category, the supplier is required to provide documentary evidence of their qualification. This may include certificates, licenses, attestations, and other documents specified in the technical assignment.
Confidentiality of the process
Information related to the review, evaluation, and comparison of tender applications, as well as recommendations for awarding the contract, is confidential. It must not be disclosed to suppliers or any third parties not involved in the process.
Requests for clarification from NLMK
The company reserves the right to request that procurement participants provide clarification regarding their bids. This helps to streamline the review and evaluation of submissions.
Requests for clarification from suppliers
The counterparty may request clarifications on the tender documentation no later than 2 (two) calendar days before the application deadline.
Application submission deadlines
Tender applications received after the deadline will not be considered. Meeting the submission deadline is a mandatory condition for tender participation.
Rejection of applications
The company may reject all applications at any stage prior to the announcement of the tender winner. This right is exercised if none of the proposals meet the requirements or interests of the company.
After reviewing and evaluating proposals, NLMK may negotiate with any of the tender participants on any aspects of their bids. This allows clarification of details and reaching the most favorable terms of cooperation.
* Temperature anomalies vs. the pre-industrial period of the 1850s–1900s
Electronic document management
Electronic Document Management (EDM): Advantages and Conditions of Use
Electronic Document Management (EDM): Advantages and Conditions of Use
Electronic Document Management (EDM) is a modern way to exchange legally significant documents in digital format. It fully replaces paper-based documents and allows for much faster approval, signing, and storage processes.
Why is it important?Using EDM reduces costs for printing, courier services, and archive storage, minimizes the risk of document loss, and simplifies their search. All transactions are conducted via certified operators and guarantee the legal significance of the documents in accordance with Russian law.
For whom?EDM is convenient for all companies working with documents: suppliers, contractors, and partners. It is a required step in digital business transformation and simplifies interaction with our company.
How to connect?Switching to EDM is a straightforward process consisting of several stages. We have prepared a step-by-step guide (a link to the file will be provided here), which will help you quickly connect and start benefiting from digital document management.
Advantages of EDM
Advantages of EDM
- Time Saving Sending documents online takes just a few minutes, eliminating delays related to printing, signing, and courier delivery.
- Cost Reduction EDM helps reduce spending on paper, printing, delivery, and document archive storage.
- Legal Validity All electronic documents are signed with a qualified electronic signature (QES) and have full legal force under Russian law.
- Simplified Document Flow The digital format eliminates duplication, errors in data entry, and document loss, while making them easier to find and access.
- Fast Approvals Documents can be signed and exchanged at any time from anywhere in the world, speeding up collaboration processes.
- Eco-Friendliness Abandoning paper media reduces the environmental impact and promotes sustainable development.
- Easy Integration EDM easily integrates with most accounting systems (e.g., 1C, etc.), which makes work more convenient.
Work in EDM (for Russian Residents Only)
Work in EDM (for Russian Residents Only)
Exchange of documents that have legal force and are equivalent to originals in accordance with Russian law.
EDM is carried out via an operator system included in the Russian Federal Tax Service’s trust network. It is used to ensure the transition from paper-based legally significant documents (invoice, TOR-12, UTD) to electronic legally significant documents, i.e., files enhanced by a digital signature.
NLMK currently has agreements with EDM providers — Taxcom, Diadok Contour, SBIS Tensor, Korus Consulting. You can find detailed information about EDM operators on their official websites:
issgovernance.com
diadoc.ru
tensor.ru
esphere.ru
* Temperature anomalies vs. the pre-industrial period of the 1850s–1900s
In order to conduct a scenario analysis of climate-related risks and opportunities, data were collected from various sources, including:
- The International Energy Agency (IEA)
- The International Institute for Applied Systems Analysis (IIASA)
- Shared Socioeconomic Pathways (SSP)
- The Global Economic Forum
- The World Resources Institute (WRI)
- The Climate Impact Atlas of the Royal Netherlands Meteorological Institute (jointly with the CMIP5 project)
In 2022, an in-depth analysis of physical risks was carried out at Stoilensky, the Group's main mining asset.
The assessment included:
- Analysis of existing global climate models (CMIP615) and development of an ensemble model
- Scenario modelling of anticipated changes in the weather and climate of the Belgorod Region for the timeframes of 2020-2040, 2040-2060, and 2080-2100
- Identification of Stoilensky's exposure to weather and climate risks
- Analysis of historical exposure and vulnerability of the site's infrastructure to the identified risks
- Determination of climate impact thresholds that, if exceeded, will negatively affect the operation of Stoilensky's facilities
- Assessment of the risk materialization probability and infrastructure vulnerability
- Recommendations on risk management (including adaptation)
The assessment has determined that the number of days wherein extreme weather events occur will increase on the medium- and long-term horizons (heatwaves, tropical nights, torrential rainfall and abnormal precipitation, blizzards, abnormally high atmospheric pressure, strong thunderstorms). However, should the proposed adaptation recommendations be followed, both for the employees and the equipment, the potential damage from materialization of such risks will be negligible or non-existent.
Adaptation measures aimed at employees
- Development of a revised work schedule in case of extreme heat
- Arrangement of shaded areas
- Provision of potable water and electrolyte drinks
- Personal protective equipment against heat
Adaptation measures aimed at equipment
- Funding of research into heat resistance of motors and other equipment
- Development of a revised work schedule in case of extreme heat
Adaptation measures in case of more frequent extreme precipitation
- Improvement of roofing to prevent leaks
The Company uses internal carbon pricing in order to support assessment and prioritization of climate projects, forecasting of costs related to the introduction of CBAM and climate risks. The base for the internal carbon price is the projected allowance price under EU ETS adjusted for the Company’s share of exports to Europe.
An in-house team of specialists calculates the cradle-to-gate footprint for all types of NLMK Lipetsk’s products (all production processes starting from raw and fuel materials extraction to the exit gates of the site) with a high level of detail.
The carbon footprint was estimated in accordance with the GHG Protocol Product Life Cycle Accounting and Reporting Standard using a special calculation method.
Internal calculations for NLMK Lipetsk’s slabs and grain-oriented steel were verified independently in 2023. In 2025, the external verification of the carbon footprint of certain groups of steel slabs, including carbon steel, low-carbon steel, ultra-low-carbon steel, and low-alloy steel, was successfully completed.
The footprint data on NLMK Lipetsk’s slabs are integrated into the calculations by the Group’s international companies that do downstream processing of these slabs. In 2024 the Company conducted an independent verification of the carbon footprint of certain steel products within the cradle-to-gate scope.