Investment Programme: 2014

In 2014, the Company’s investments amounted to USD 595 million, compared to USD 478 million in 2013. The major investment projects of the Company are as follows:

  • construction of Pellet Plant #3 (PP-3) at Mikhailovsky GOK;
  • construction of the third hot-briquetted iron plant (HBI-3 Plant) at Lebedinsky GOK;
  • construction of an oxygen facility at OEMK;
  • construction of Coke Oven Battery #6 (CB-6) at Ural Steel;
  • purchase of new high-capacity pit equipment for the Company’s Mining Segment.

Mining Segment

Strengthening positions in HBI

construction of HBI-3 Plant at Lebedinsky GOK

The construction of HBI-3 Plant is the key strategic investment project of the Company. The project that provides for the development, production and supply of the equipment, as well as the automation of the first and the second stages is being implemented by a consortium of Primetals Technologies and Midrex Technologies, which signed a contract with Metalloinvest in August 2012. Gipromez, a Russian industrial engineering company, and a part of Metalloinvest, is also involved in the implementation of the project.

After the HBI-3 Plant is completed, it will become the largest HBI production module in the world. Its production capacity will amount to 1.8 million tonnes per year. The implementation of the project will allow Metalloinvest to meet steel plants’ growing demand for high-quality raw materials and maintain global leadership in the production of merchant HBI.

Efficient development of iron ore base

Switching to high-capacity equipment for mining and transport operations

The efficiency of mining and transport operations is an important factor in ensuring the efficiency of the Mining Segment.

In 2014, Metalloinvest continued to implement the modernisation programme for its mining and transport units. The implementation of the main stage started in 2013, when the enterprises were equipped with six Caterpillar dump trucks with a load capacity of 180 tonnes and two BelAZ trucks with load capacities of 220 and 160 tonnes.

The Company has significantly accelerated implementation of the programme in 2014. Five Caterpillar dump trucks with a load capacity of 180 tonnes, six BelAZ dump trucks with load capacity 130 tonnes and one BelAZ with 220 tonnes load capacity were supplied to the Company. Vehicles, purchased in 2014, can carry 1,900 tonnes loads per trip (total load capacity of the dump trucks, purchased in 2013, amounted to 1,460 tonnes).

Heavy-duty Japanese Hitachi excavators, with 23 cubic metre scoops, were introduced at the open-pit mines of Lebedinsky GOK and Mikhailovsky GOK. Together with the introduction of dump trucks with 180–220 tonnes lift capacity, this allowed the enterprises to create excavator and heavy duty truck units to increase the operational efficiency of the Company’s Mining Segment.

Lebedinsky GOK’s transport fleet was upgraded by four excavators with 10 —15 cubic metre scoops. In addition, a unique EKG-20 KM excavator manufactured by P. G. Korobkov IZ-KARTEX Ltd. with a 20 cubic metre scoop was introduced on a trial basis at the plant. The trial will allow the Company to determine feasibility of using this type of equipment in the mining and geological conditions of the plant’s pit.

In 2014, Lebedinsky GOK and Mikhailovsky GOK received a total of 11 heavy-duty dump trucks, 10 excavators, 3 drilling rigs, 10 pulling units and 100 dump cars.

Strengthening market position of the high-processing iron ore segment

The construction of Pellet Plant #3 at Mikhailovsky GOK

The construction of the Pellet Plant #3 unit is a unique project in terms of its scale and significance. The unit will allow Metalloinvest to increase the annual pellet production capacity of Mikhailovsky GOK by 5 million tonnes, to 15 million tonnes per year.

The production unit under construction will include the technology for all of the processing stages: from iron ore concentrate filtration and pelletising facilities to pellet firing and shipping.

In 2014, after the construction and installation work was completed, processing unit and external infrastructure objects were prepared for commissioning. In February 2015, the Company started gradually commissioning the unit’s main equipment.

The unit is notable for its innovative process design solutions and equipment, which include: automatic systems that control the parameters of the system and monitor the production process, an improved gas-air flow system compared with existing pellet plants that allows emission to be minimised, higher capacity and better energy indicators.

Efficient development of the iron ore base

Up to 10 million tonnes of concentrate per year is produced from oxidised quartzites at Mikhailovsky GOK

The modernisation of sector 14 of the crushing and sorting plant (DOK) at Mikhailovsky GOK was completed in December of 2014. It was designed to carry out pilot testing and produce hematite-magnetite concentrate from oxidised quartzites.

As part of the modernisation project, a new high-intensity magnetic separation unit was built and three high-intensity separators by EriezMaqnetics, Longi and Outotec were put into operation.

The project was implemented by Outotec, one of the world’s leading engineering companies in the field of ore-beneficiation technology, which developed the technological specifications. The work was carried out by the Urban Institute for Metallurgical Plants Design LLC (Gipromez) and engineering plans were developed by the Engineering Directorate of Mikhailovsky GOK.

The experiment involves the production of concentrate from oxidised ferruginous quartzites in industrial volumes using existing production facilities for ore grinding. The beneficiation of oxidised ferruginous quartzite is completed through magnetic flotation, achieved with equipment that uses a high-intensity magnetic separation method.

Beneficiation specialists managed to obtain a regulated amount of the concentrate in course of work, which contains up to 66% of ferrum and less than 5% of silica. Conducting the experiment will allow the Company to confirm the feasibility of the process solutions and to correct, if needed, technological specifications for further new plant design.

The decision on further project implementation will be taken after the pilot experiment has been completed.

Steel Segment

Increases in operational efficiency

Construction of an air separation unit at OEMK

The oxygen plant was designed and constructed in 2012–2013.

The equipment of the new oxygen plant with a cryogenic air separation unit (VRU #3) was supplied by Linde (Germany). The plant’s capacity is 20,000 cubic metres of oxygen and nitrogen per hour and 1 tonne of crystallised argon per hour.

In 2014, process equipment was installed. In December 2014, the plant was put into trial operation and in March 2015 it will enter full industrial operation.

The new plant will provide OEMK the air separation products needed for the decommissioning of VRU #2 unit with expired regulatory service term and for putting the new oxygen-consuming units into operation in blast furnace shop.

Maximised profitability of the Steel Segment

Construction of Coke oven battery #6 at Ural Steel

Coke Oven Battery #6 (KB-6) was put into trial operation in 2014. The Company plans to complete the remaining work on KB-6 and the reconstruction of the coke and by product production facilities at Ural Steel in the first half of 2015.

This project will increase coke production capacity, which will reduce the dependence on external suppliers and decrease production costs, as well as improving the consistency of coke quality.

In addition to the construction of Coke Oven Battery #6, the project involves the construction of a dust-free coke emission unit, which captures and purifies gas emissions from residual dust. The project also provides for the installation of wastewater treatment and the construction of additional power facilities for coke production. This will reduce the unit’s environmental footprint.

Modernisation of production assets

Upgrading the main facilities and the reconstruction of production assets at Ural Steel

The modernisation of the casting bay of the blast furnace shop was performed at Ural Steel in 2014. This increased production volume of cold pig iron up to 1.9 million tonnes per year, due to the increased working run time of pig iron casting machines #1–4 in the blast furnace shop. Modernisation measures allowed the Company to increase the amount of pig iron poured into ladle capsules and to cut the time taken to prepare ladle capsules for pig iron casting on casting machines.

The early detection system for the continuous casting machine #2 was reconstructed. This allowed for increased casting quality and decreased the risks of disruption of production programmes.

As part of the overhaul of the 2800 plant, the frequency inverter of its main drives was replaced.


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