NLMK Group (LSE: NLMK), Russia’s leading manufacturer of steel and HVA steel products, has started hot testing the second pulverized coal injection (PCI) unit in its blast furnace operations at the main production site in Lipetsk (Novolipetsk).

The Company has started installing this resource-saving technology, which has only recently been introduced in Russia, at its Blast Furnace #4 with a capacity of approximately 2.1 million tonnes of pig iron per year. In 2013, a similar unit was successfully installed at Blast Furnace #5 with a capacity of 3 million tonnes of pig iron per year.

As a result, over a third of Novolipetsk pig iron production capacities will be equipped with resource-saving PCI systems.

NLMK Managing Director Sergey Filatov said:

“Installing pulverized coal injection technology at the Lipetsk site is one of the key elements of our general programme to boost efficiency and cut unit costs, which is one of the key priorities of NLMK’s Strategy 2017. Expanded use of this technology was made possible through the experience of working with PCI acquired by our blast furnace operators, and the radical change in the quality of coke brought about by new technologies and approaches to coke and chemical operations.”

PCI technology involves co-injecting natural gas and fine coal particles into the blast furnace. Using pulverized coal fuel made from steam coals reduces gas consumption by 70–80% and coke consumption by 20–30%. Replacing expensive raw materials with cheaper alternatives (coking coals with steam coals) will reduce the cost of producing pig iron, a key feedstock for steel manufacturing. Moreover, the use of new technologies in coke and chemical operations has already allowed NLMK to obtain high-quality coke from domestically sourced inputs.

Approximately RUB 3.7 billion has been invested in the project, which involves equipping Blast Furnaces #4 and #5 with PCI systems.

For reference:

In 2011, NLMK’s project to install pulverized coal injection for pig iron production, alongside its project to build a new recovery co-generation plant that runs on blast furnace gas, received an award from the European Bank for Reconstruction and Development for its innovative approach to energy management and environmental protection.

In 2012, NLMK Group received the ISO 50001 Energy Management Systems certificate confirming that it meets international standards – the first company in the Russian steel industry to do so. The certification of NLMK’s energy management system, testifying to its compliance with the ISO 50001:2011 international standard, is an endorsement of the company’s success in employing the best technologies for optimizing energy consumption and making rational use of energy resources.

Pig iron production capacity at Novolipetsk (NLMK’s main production site in Lipetsk) exceeds 12 m tpa. Blast furnaces #4 (2.1 m tpa), #5 (3 m tpa), #6 (3 m tpa) and #7 (4.2 m tpa) are in operation, whilst blast furnaces #2 (0.8 m tpa) and #3 (1.6 m tpa) were idled in 2012 and 2013 respectively.

About NLMK Group

NLMK Group is a vertically integrated steel company and Russia’s leading steel maker and manufacturer of rolled products with high added value. 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. The Company generated US$ 10.9 billion in revenue, and EBITDA of US$ 1.5 billion in 2013.

NLMK’s ordinary shares are traded on the Moscow Stock Exchange (MICEX-RTS, ticker symbol: NLMK), and its global depositary shares are traded on the London Stock Exchange (ticker symbol: NLMK:LI).

Media contact info:
Sergey Babichenko
Tel. +7 (916) 824 6743
babichenko_sy@nlmk.com

Investor contact info:
Sergey Takhiev
Tel. +7 (495) 915 1575
tahiev_sa@nlmk.com