NLMK Group generates 425 million ruble saving through PCI implementation at Novolipetsk

PCI technology involves the co-injection of natural gas and fine thermal coal particles into the blast furnace resulting in lower natural gas and coke consumption. Replacing the expensive feedstock, i.e. natural gas and coke with the cheaper alternative, i.e. steam coal, reduces the cost of pig iron production; and subsequently that of steel manufacturing; while maintaining high quality and efficiency.

NLMK demonstrated its commitment to bringing innovative technological solutions to Russia when it began implementing the resource-saving PCI technology at the Lipetsk site in 2013. To date, the plant has successfully completed guarantee tests and moved on to commercial operation of PCI systems at two blast furnaces: No.5 (with a capacity of 3 million tonnes per year) and No.4 (with a capacity of 2 million tonnes per year).

Even during the PCI testing period coke consumption at these blast furnaces decreased by 10% and natural gas consumption decreased by 40%.

Sergey Filatov, Novolipetsk Managing Director, said: “More than a third of Novolipetsk blast furnaces have been fitted with PCI systems. We continue to work on enhancing the efficiency and cutting the cost of pig iron production. With this in mind, we plan to equip almost all Novolipetsk blast furnaces (which produce over 12 million tonnes of pig iron per year) with PCI systems. We are currently preparing to implement this technology at the plant’s two largest blast furnaces: No.6 (with a capacity of 3.2 million tonnes per year) and No.7 (with a capacity of 4.2 million tonnes per year). As a result, coke consumption at these furnaces will reduce by 20%, and natural gas consumption will reduce by 60%.”

Productivity of all blast furnaces in 2014 was increased as a result of improved pig iron smelting technology; mastering pulverized coal injection; and increased operational efficiency. Daily output increased by 2.3% year-on-year to reach an average of 36,000 tonnes of pig iron. The average daily production of Blast Furnace #7, the most modern blast furnace in Russia, increased by 15.1% to 11,900 tonnes per day.

Novolipetsk is the main production site of NLMK Group, Russia’s leading manufacturer of steel and high value added rolled products, and one of the most efficient steelmaking companies in the world. Novolipetsk is the nucleus of NLMK Group’s single production chain, with assets in Russia, the EU and the USA.

Novolipetsk produced 12.56 million tonnes in 2014, with capacities running at 100%. This represents an all-time high over the 80 years of NLMK’s history. Production grew by 1.3% compared to 2013. This record performance was supported by productivity improvements throughout the value chain of the site.

Novolipetsk’s high-quality steel products are used in various strategically important industries, from construction and engineering to the manufacture of power-generating equipment and large-diameter pipes.

NLMK Group is the largest steelmaker in Russia and one of the most efficient in the world. 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.

NLMK has the most competitive cash cost among global manufacturers; and one of the highest profitability levels in the sector. During the first six months of 2014, the company generated \$5.4 billion in revenue; \$1,1 billion in EBITDA; and a net profit of \$332 million.

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