SCM GROUP PUBLIC REPORT 2011

Ilyich Steel plant began the implementation of the two large
projects: construction of the turboblower and installation
of the coal pulverizing unit in the blast furnace hearths. The
turbobower will be put into operation in 2012, thus, allowing
to increase the productivity of the blast furnace #3 by
7%, as well as to decrease the weighted use of coke by 7kg
per tonne of cast iron. The total volume of project investment
in 2011 amounted to $8m. The coal pulverizing unit will also
be put into operation in 2012, thus, allowing to completely
forgo the use of natural gas in the plant’s blast furnaces, as
well as to decrease the weighted use of coke by 29kg per
tonne of cast iron. The total volume of project investment is
$177m, $21m of which was used in 2011. The stated technology
will be installed at all the blast furnaces at the plant.
Azovstal Steel Plant implemented the active stage of the controlled
freezing unit construction at the heavy plate production
facilities. Upon completion of the construction works,
the plant will be able to produce rolled sheets from X80 and
X90 grade steel. SMS Siemag AG was selected as general
supplier of the equipment. The total project investment volume
amounted to approximately $63m.
Azovstal Steel Plant also invested $2.23m in the environmental
projects in 2011.
Yenakiyevo Steel Plant put into operation a modern blast
furnace complex #3 instead of the disassembled obsolete
one. The installed annual capacity of the new equipment is
1.2m tonnes of cast iron. During the period of operation,
the new blast furnace allowed to decrease the weighted use
of coke in cast iron production by 112.2kg per tonne (from
572.2kg to 460kg per tonne) and the weighted use of iron –
by 15.8kg per tonne (from 1,010kg to 994.3kg per tonne).
The total project investment volume exceeded $226m,
$60m of which was used in 2011.
Mining division
InGOK commissioned the second complex for magnetic floatation
beneficiation of iron ore concentrate with annual installed
capacity of 3.3m tonnes of concentrate. The total project
investment volume amounted to approximately $43m.
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Focus points of the year
SCM GROUP PUBLIC REPORT
CREATING SUSTAINABLE VALUE
In 2001, steel production volume increased by 64.4% yearon-year,
amounting to 14.375m tonnes, coking coal production
increased by 12.3%, amounting to 11.34m tonnes,
while iron ore concentrate production remained unchanged,
amounting to 35.74m tonnes.
The increase in steel production was caused by the integration
of Mariupol Ilyich Plant into Metinvest in November
2010, as well as by commissioning the reconstructed blast
furnace #3 at Yenakiyevo Steel Plant at the end of the year.
Simultaneously, the production volumes of Azovstal Steel
Plant decreased by 96,000 tonnes, year-on-year.
The volume of coking coal production at the US mines increased
by 1.4m tonnes, while the Ukrainian mines of Metinvest
demonstrated a 153,000 tonnes decrease in coking
coal production.
In spite of the 29.7% demand decrease for iron ore concentrate
by the external consumers, its production remained
stable and high. The reason for such production stability was
the increased internal consumption – by Metinvest Group's
enterprises, after the integration of Ilyich Plant into Metinvest,
which was completed in June 2011.
Within the framework of Metinvest Group’s metallurgical
enterprises’ modernization and reconstruction program,
Azovstal Steel Plant put its open-hearth blast furnaces out
of operation. The plant completely switched its production
facilities to oxygen converters. As a result, the quality
of the end product will increase significantly, while the environmental
footprint of the plant will decrease.
In June, Yenakiyevo Steel Plant signed a long-term contract
with Air Liquide (France) for the supply of industrial gases. Under
the signed contract, Air Liquide will invest $139m in the
construction of the air separation unit with the installed daily
production capacity of 1,700 tonnes of oxygen, nitrogen, and
argon. The project will be funded by the European Bank for
Reconstruction and Development. Additionally, Yenakiyevo
Steel Plant implemented a large-scale $25m repairs program,
aimed at increasing the environmental safety, the economic effectiveness,
and operational reliability of its equipment.
In July, United Coal Company commissioned Affinity Mine,
a new mine with the installed annual production capacity
of 1.9m tonnes of high quality coking coal.
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