The Russian steel producer Novolipetsk Steel (NLMK) has announced the approval of the third phase of the group's Technical Upgrading Program.
The third phase of the program includes investment projects covering the 2009-2011 period and also outlines NLMK's production strategy until 2015. Under the program, at its Russian facilities NLMK plans to achieve annual crude steel production of 22 million metric tons, flat steel production of 6.9 million metric tons and long steel production of 5.9 million metric tons. The total investment in the third phase of the program amounts to $4.1 billion in the Lipetsk-based facility and approximately $2 billion for the Maxi-Group facilities. In addition, the program is directed at increasing NLMK's overseas annual production capacities to 3.1 million metric tons of crude steel and 6.4 million metric tons of rolled steel products.
To increase its Russia-based facilities' annual crude steel production to 22 million metric tons, NLMK plans to raise its Lipetsk-based plant's BOF steel production to 14.5 million metric tons, and to increase its Lipetsk-based plant's EAF steel capacity to 1.5 million metric tons via construction of a new slab caster, hot rolling mill and a new EAF. In addition, NLMK plans to increase Maxi-Group's EAF steel production to six million metric tons.
In order to reach its targeted flat steel production of 6.9 million metric tons per year at its Russian production sites, NLMK will increase its Lipetsk hot rolled steel production to 6.9 million metric tons, including 1.3 million metric tons to be produced by the new casting and rolling mill, and also will raise its cold rolling and pre-painted annual steel production capacity to 4.9 million metric tons through the commissioning of new cold rolling mills, galvanizing and pre-painting lines. In addition, by the end of 2008, NLMK is to decide on whether to order a Togliatti EAF steelmaking plant which may add an additional two million metric tons of hot rolled steel per year.
Within the scope of its aim to increase its long steel production to 5.9 million metric tons, in 2008 NLMK plans to commission a one million metric tons wire rod mill at Maxi-Group's Berezovsky production site and also to start the construction of the first stage of its Kaluga EAF plant with an annual production capacity of 1.2 million metric tons of rebar and shape profiles by 2011, to be increased to two million metric tons by 2015. Moreover, by the end of 2008 NLMK will take a final decision on whether to construct Voronezh EAF facility with an annual production capacity of two million metric tons of long products.
By 2015, NLMK plans to achieve at least 400,000 metric tons of transformer steel capacity and to increase the share of Hi-B grades in the total transformer steel production volume to more than 70 percent.
To ensure self-sufficiency in raw material supplies, NLMK plans to commission the first stage of a pelletizing plant in 2011 with an annual production capacity of three million metric tons, which is set to increase to six million metric tons in 2014. In addition, NLMK plans to commence exploitation in 2011 of the Zhernovskoe-1 coking coal deposit with an annual capacity of three million metric tons. Furthermore, NLMK is targeting 6.5 million metric tons of annual coke production capacity by the construction of a new coke battery No.6 at Altai-koks and the simultaneous closing of four coke batteries at its Lipetsk-based production site. Moreover, NLMK intends to raise the scrap collection capacities from its own and Maxi-Group's yards to seven million metric tons in 2015, up from 2.1 million metric tons in 2007.
As far as its overseas production facilities are concerned, NLMK plans to increase DanSteel's production capacity to 600,000 metric tons a year, including an increase in high-value added steel products. In addition, to achieve its proposed increase of the NLMK-Duferco Group JV's longs and flats capacity up to 6.3 million metric tons, the company will increase its hot rolled plates production to 900,000 metric tons at the Clabecq site by 2010 through introduction of plate quenching and tempering technology; it will raise the crude steel production capacity to 2.1 million metric tons per annum at its Carsid site via commissioning of a vacuum degasser and the revamp of the continuous slab caster; the company will increase flat steel capacity to three million metric tons at its La Louviere operation through commissioning of the new reheating furnace; and the company will also raise annual capacity of plate and forging ingots to 600,000 metric tons at its Verona Steel site via the plant's modernization.
Currently, NLMK is implementing the second phase of its Technical Upgrading Program, which is expected to be completed by 2011. As a result of the implementation of the second phase, NLMK plans to increase its Russian operations' annual crude steel production capacity to 16.3 million metric tons, including 12.4 million metric tons to be produced by Lipetsk-based facility and the balance by Maxi-Group. The investment amounts in the second phase of the program total $4.4 billion for NLMK and about $1.8 billion for Maxi-Group.