Severstal 2015 Capital Investment Program

PAO “Severstal” (“Severstal” or “the Company”), one of the world’s leading vertically integrated steel and steel-related mining companies, today announces details of its 2015 capital investment program to support the delivery of Severstal’s strategy and long-term competitiveness.

Severstal plans to invest approximately RUR 30 billion across the business in 2015. This investment will primarily focus on developing key areas of the Company’s strategy including increased production of high-value added products; enhancement of customer care, and; continuous improvement to health and safety standards. At the same time, management will remain focused on the reduction of operational and administrative costs.

Severstal Russian Steel

Planned investment across the Severstal Russian Steel division in 2015 is approximately RUR 16 billion. RUR 8 billion of this will be invested in development projects including the construction of a new coating line and the revamping of the four-stand continuous tandem cold rolling mill 1700, both at the Cherepovets Steel Mill. 

RUR 8 billion will be invested in a combination of maintenance and environmental improvement projects.

Severstal Resources

Planned investment across the Severstal Resources division in 2015 is approximately RUR 13 billion. RUR 7 billion of this will be invested in development projects including the completion of the construction of an incline shaft at Zapolyarnaya and, at Karelsky Okatysh, the construction of a new water rotation unit and improvements to the stripping works.

In 2015, RUR 6 billion will be invested in the maintenance of Severstal’s coal and iron or operations as well as health and safety improvement projects.

Alexey Kulichenko, CFO of Severstal, commented: “Severstal maintains a prudent and balanced approach to capital expenditure that is flexible to market conditions. The 2015 investment program will enable Severstal to continue to deliver against its strategic objectives by further enhancing efficiency and continuing to generate healthy free cash flow. At the same time, we remain vigorously focused on developing our market-leading product and service standards.”

 

The planned investments are preliminary estimates and amounts could be adjusted dependent on FX changes. The majority of the Company’s expenditure in 2015 will be undertaken in RUB.