Metalloinvest presents its Qualitative Change Strategy
16 February 2021
Metalloinvest, a leading global iron ore and HBI producer and supplier, and one of the leading regional producers of high-quality steel, presented the Qualitative Change Strategy to 2032.
Presenting the strategy to employees, Nazim Efendiev, CEO of Management Company Metalloinvest, said: "We have a clear understanding of the global processes taking place, of our strengths and areas for development. Metalloinvest's mission is to be the evolutionary basis of modern metallurgy for future generations. We see our Company as a world-leading producer of high-quality iron ore, metallised and steel products, creating the responsible metallurgy of the future through open partnership. Metalloinvest's products are at the heart of the steel industry's transition towards green technologies and a reduced carbon footprint."
The Strategy is based on the fundamental principles of Quality, Environment, Partnership and Development.
The Company's strategic priorities are increasing sales margins, improving operational and managerial efficiency, and sustainable development.
Workplace safety and comfortable working conditions remain key production priorities for Metalloinvest. 2021 has been declared the Year of Occupational Safety. Measures will be implemented to improve production safety culture, and transport and gas safety programmes will be introduced.
Implementation of the Qualitative Change Strategy is planned in two phases:
Until 2026 - Optimisation of the commodity balance. The goal is to improve margins and ensure sustainable sales in high-margin markets, by matching production capabilities to peak market demand. The plan is to bring the quality of iron ore to the level of international best standards, increase production of pellets, hot briquetted and direct reduced iron (HBI/DRI), and expand the Company’s presence in niche markets for steel products.
Until 2032 - Global leadership. The objective is to consolidate a leading position in the production of high-quality iron ore, metallised and steel products using green technology. The Company will undertake extensive research to identify optimal solutions for the use of hydrogen in metals and mining operations, and for production of HBI/DRI from concentrate, bypassing the pelletisation stage. Metalloinvest will also seek opportunities for implementing potential strategic alliances with green HBI/DRI producers.
The Strategy entails increased investment in the development of high-quality products. Between 2021-2023, Metalloinvest plans to significantly ramp up capex from the 2019-2020 level of around 450 mn dollars.
In 2021, capital expenditure is projected to exceed 560 mn dollars, with development projects accounting for 70% of expenditure.
Key investment and development areas:Improving the quality of iron ore
- Completion of construction of the concentrate beneficiation facility at Andrey Varichev Mikhailovsky GOK;
- Implementation of concentrate flotation technology at Mikhailovsky GOK and Lebedinsky GOK.
- Reconstruction of Blast Furnaces at Mikhailovsky GOK, Lebedinsky GOK and Andrey Ugarov OEMK.
- Construction of a new HBI Plant in Zheleznogorsk (Kursk region);
- Reconstruction of HBI-1 and HBI-3 Plants at Lebedinsky GOK;
- Reconstruction of DRI Plant #3 at OEMK.
- Completion of the second stage of the crushing and conveyor facility construction at Mikhailovsky GOK,
- Implementation of cycling-flow technology at Lebedinsky GOK.
- Modernisation of blast furnaces at Ural Steel,
- Construction of Electric Arc Furnace #5 and a steel processing facility, equipment modernisation at OEMK's Rolling Mill.
Metalloinvest also continues to implement measures as part of the Environmental Programme with investments in the amount of 22.3 bn roubles and the Energy Efficiency Programme with investments in the amount of 23.5 bn roubles.
As part of the Strategy, the digital transformation of business processes will continue. Projects covering all aspects of the Company's operations are at different stages of implementation, from production chain, open-pit mine operations and industrial safety to procurement, analytics and employee health monitoring.
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