NMDC and Severstal sign pact for 3 million tonnes steel plant

Sunday, 13 Nov 2011

BL reported that India’s largest iron ore miner NMDC and Russian steel maker Severstal signed the Implementation Protocol in Moscow for setting up a joint venture steel plant in Karnataka.

A high level delegation from India, comprising the Minister of Steel, Mr Beni Prasad Verma, the secretary of steel, Mr PK Misra and NMDC’s CMD, Mr Rana Som, apart from other senior officials, visited Moscow to take the project forward.

The protocol defines the target initial plant capacity which would be 3 million tonnes of finished steel. It also confirms the intention of NMDC and Severstal to fully meet the joint venture’s captive requirements of both iron ore and coking coal so that it becomes fully integrated for these primary raw materials.

Until the captive assets are fully developed, NMDC and Severstal would take up the responsibilities to supply iron ore and coking coal to the joint venture from their existing assets or alternative sources.

Mr Alexey Mordashov CEO of Severstal said that “Our joint venture project in India with NMDC provides a good fit with Severstal’s vertically integrated, growth-focused business model”.

Mr PK Misra said that “The joint venture between Severstal and NMDC will be another milestone in India Russia economic cooperation and will be an important investment for the Indian Steel industry.

(Sourced from BL)

Mordashov: Sale of Lucchini not realistic under current market conditions

Fri, March04, 2011

Alexey Mordashov, CEO of Russian steelmaking group Severstal, has stated that the sale of the Italian Severstal-owned Lucchini Group "does not look realistic under current market conditions." The statement by the Russian tycoon, who reached an agreement with banks last month for the restructuring of Lucchini's $770 million debt, was made during a conference call with financial analysts.

Accordingly, after the Mordashov announcement, Lucchini's sale now looks less likely to happen. Domestic trade unions, concerned by the situation, underline the need for a rapid sale of the company, which operates an integrated steelmaking facility in Piombino, Livorno. "The agreement reached with the banks does not award Mordashov the control of Lucchini Group," explained Luciano Gabrielli, local leader of the Fiom trade union. "The Piombino steel mill is in trouble and things are going to worsen if there is no change," he added.

Another local trade union official stated, "Mordashov's view is scarcely understandable, as it is up to the bank to set the schedule for any transaction. At this point it is necessary that Italian government meet the national and company trade unions to discuss the future of the factory".

Tags: Italy , Europe , Severstal , M&A , steelmaking , European Union , Mediterranean

Severstal announces USD 2 billion investment program for 2011

Tuesday, 22 Feb 2011

OAO Severstal one of the world leading integrated steel and mining companies announces a target USD 2 billion capital investment program for the current financial year. Severstal will continue to improve operating efficiency, modernize its operational facilities and ensure that the Company maintains industry leading standards of health and safety.

In 2011 the total amount of investment at Severstal Russian Steel will be approximately USD 940 million around a 73% increase on 2010 and will include the following key projects: the continued construction of a mini-mill in Balakovo in the Saratov Region, the renovation of the No 7 coke oven battery, the modernization of the No 5 blast furnace and the construction of a second polymer coating line in Cherepovets and the large-scale IT projects.

In 2011 the total amount of investment at Severstal Resources will be approximately USD 650 million around a 53% increase on 2010 and will include a project to modernize production equipment across the division’s iron ore mills and coalmines, the completion of a thermoelectric power station burning coalmine methane in Vorkuta, an exploration of the Putu iron ore deposit in Liberia, the continued development of the division’s gold mining assets and a coalmine at PBS Coals.

In 2011 the total amount of investment at Severstal North America will be approximately USD 465 million around a 69% increase over 2010, and will include the construction and commissioning and start-up of the 2nd Electric Arc Furnace, Continuous Caster, Tunnel Furnace, Pickle line and the 2nd Hot Dip Galvanizing line at Severstal Columbus, new Cold Rolling Complex and Hot Dip Galvanizing line at Severstal Dearborn.

Overall, the level of CAPEX represents an approximately 48% increase over the level for 2010.

Mr Alexei Kulichenko CFO of Severstal commented that “In 2011 Severstal will continue to make investments across its businesses in order to enhance our position as a market leader in the production of high added value products, improve our operational efficiency and reduce costs. In Russia and CIS, steel use is estimated to increase by approximately 8% in 2011.”