Severstal 2016 Capital Investment Program

PAO Severstal, one of the world’s leading vertically integrated steel and steel-related mining companies, today announces details of its 2016 capital investment program to support its operational excellence and long-term competitiveness.

Severstal plans to invest approximately RUR 43 billion across the business in 2016. This investment will primarily focus on developing key areas of the company’s strategy including cost control, increased production of high-value added products and enhancement of customer care.

Severstal Russian Steel

Planned investment across the Severstal Russian Steel division in 2016 is approximately RUR 25.6 billion. RUR 15.2 billion of this will be invested in development projects including the construction of a new coating line and ladle furnace #2, and revamping of the four-stand continuous tandem cold rolling mill 1700, all at the Cherepovets Steel Mill.

RUR 10.4 billion will be invested in maintenance and environmental improvement projects.

Severstal Resources

Planned investment across the Severstal Resources division in 2016 is approximately RUR 17 billion. RUR 7 billion of this will be invested in development of the assets. The majority of this will be spent on improvements to the stripping works.

In 2016, RUR 10 billion will be invested in the maintenance of Severstal’s coal and iron ore 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. We continue to focus on creating value through further operational improvements, cost control projects and customer care initiatives. At the same time, our development projects, such as the construction of a new coating line at CherMK, will enable Severstal to increase the production of high-value added products in line with our strategic sales focus”.

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 rubles.