In 2020, all divisions of MMK Group continued to work on improving energy efficiency which resulted in significant achievements in the development of the energy management system, and the total planned economic effect amounted to RUB 267.3 million per annum.

In October 2020, Magnitogorsk Iron and Steels Works (MMK) successfully passed the first supervisory review of its energy management system in accordance with the new requirements of the international standard ISO 50001:2018. Specialists of the international certification body TÜV International Certification (Germany) who conducted the audit did not find any inconsistencies or deviations during the review. The experts noted that thanks to the special attention paid to energy saving issues, by MMK’s top management, as well as the well-coordinated and professional team, the Company has created all necessary conditions for the maintenance and effective functioning of the energy management system.

The successful implementation of the audit was made possible thanks to rigorous preparatory work, within the framework of MMK’s newly approved Energy Policy, the strategic goal of which is to reduce energy costs in the plant’s overall production costs. The new requirements of the standard included identifying and integrating risks related to the energy management system into the business processes of production units. MMK's divisions conducted a total of 28 internal audits of the energy management system in accordance with a programme approved by MMK’s senior management.

In July 2020, MMK published its first official Sustainability Report compiled according to Global Reporting Initiative standards (GRI Standards). The report includes the results of the Company's activities, including its results in improving energy efficiency - one of MMK's priorities. MMK is committed to implementing innovative solutions, working closely with research centres and using the best available technologies.

In 2020, MMK received the international Energy Management Insight Award in the field of energy saving and improving energy efficiency of production in accordance with the international standard ISO 50001. The prize was awarded to MMK at Clean Energy Ministerial (CEM), the Global International Forum organised by the Energy Management Working Group (EMWG), part of the United Nations Industrial Development Organisation (UNIDO) which was attended by experts from 25 countries. Tarek Emtair, Director of Energy at UNIDO, in a congratulatory letter to MMK CEO Pavel Shilyaev, noted MMK's practice may be of interest to other companies. An independent group of international experts believes that MMK’s experience demonstrates how an energy management system can be successfully integrated into existing business systems to better manage resources, maintain achieved savings and continuously improve energy performance.

For MMK Group, the development and implementation of innovation projects is an important way of improving the energy efficiency of production processes. In total, in 2020, 771 energy-efficient ideas were submitted to the Energy Management Platform (EMP), of which 188 were implemented with a predicted annual economic effect of RUB 98.5 million. In addition, last year, 7 low-budget high-performance projects (baby-capex) were implemented, the planned effect of which is a total of RUB 30.3 million.

Currently, the EMP generates ideas in all categories (energy saving, saving material and technical resources, ecology, labour protection and industrial safety and others). As part of the implementation of the EVOLUTION business system, an interface has been developed to transmit data for various types of projects from the EMP when certain statuses have been reached for further processing and data analysis. EVOLUTION transmits data on the planned costs, the projected result and a description of the main guidelines for the implementation of the proposal.

In addition, in 2020, work continued to fulfil the Company’s obligations under contracts for the provision of energy services. In particular, the economic impact of the project to install frequency converters on pumps at MMK's central power station amounted to RUB 1.4 million for the year, introduction of an automated control system for the smoke exhauster drives of the converter gas utilisation system for the oxygen-converter shop created an economic effect of RUB 22 million and replacement of the ceiling lighting at the plant’s steam-blowing power station had an economic impact of RUB 1.8 million.

Last year, according to the energy services scheme, a project was successfully implemented to clean the condenser on a turbocharged machine at the steam-blowing power station using a specific bio-organic composition, which had a confirmed economic effect of RUB 6 million.

Another area of energy efficiency improvement is the implementation of measures provided for annual energy saving programmes aimed at reducing the cost of all types of energy resources. In 2020, based on the results of the measures implemented under this programme, energy savings per year for MMK and its subsidiaries amounted to more than RUB 120 million. And the total economic effect from the implementation of various energy efficiency improvements at MMK in 2020 was RUB 267.3 million.