Severstal 2017 Capital Investment Program

Severstal announces 2017 capital investment program

February, 1, Moscow – PAO Severstal ("Severstal"; "the Company"), one of the world’s leading vertically integrated steel and steel-related mining companies, today announces details of its 2017 capital investment program, which highlights its operational excellence and long-term competitiveness.

In 2017, Severstal plans to invest approximately 43 billion roubles across the business. This investment will primarily focus on developing key areas of the company’s strategy including cost control, increasing production of high-value added products and enhancing safety and customer care.

Severstal Russian Steel

Approximately 26 billion roubles will be invested into the Severstal Russian Steel division in 2017. 12.1 billion roubles of this will be invested in development projects including the construction of a new coating line and ladle furnace number 2 at the Cherepovets Steel Mill. 1.7 billion roubles of this will be invested in IT and digital projects aimed at further operational and customer service improvements.

13.9 billion roubles will be invested in  maintenance, environmental and health and safety projects.

Severstal Resources

Approximately 17 billion roubles will be invested into the Severstal Resources division in 2017. 8.4 billion roubles of this will be invested in development of the assets. One of the most significant projects at the division is the implementation of a new multi-functional safety system at Vorkutaugol mines. This will enable the company to locate staff and equipment across the mines in real-time and improve the monitoring and control of gas emissions. The company will also continue to invest in improving the stripping works.

In 2017, 8.6 billion roubles will be invested in the maintenance of Severstal’s coal and iron ore operations.

Alexey Kulichenko, CFO of Severstal, commented: “With continuously rising competition in the global market there is a much higher demand for increasing the speed and flexibility of operational processes, as well as pressure to improve customer service. That is why we are focused on initiatives aimed at improving efficiency and customer care, including through our IT and digital offering. Safety remains our priority and it will continue to be a key area of Severstal’s investment. In 2017 we plan to finalize two major investment projects: construction of the new coating line and ladle furnace number 2 at the Cherepovets Steel Mill. At the same time Severstal maintains its balanced approach to capital expenditure and a strategy which is flexible to market conditions.”

The planned investments are preliminary estimates and amounts could be adjusted dependent on FX changes. The majority of the Company’s expenditure in 2017 will in roubles.

 

For further information please contact:

 

Investor Relations

Evgeny Belov

T: +7 (495) 926-77-66

evgenii.belov@severstal.com

 

Public Relations

Anastasia Mishanina

T: +7 (495) 926-77-66

anastasia.mishanina@severstal.com

 

 

 

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PАО Severstal is one of the world’s leading vertically integrated steel and steel related mining companies, with assets in Russia, Ukraine, Latvia, Poland, Italy and Liberia. Severstal is listed on RTS and MICEX and the company’s GDRs are traded on the LSE. Severstal reported revenue of $6,396 million and EBITDA of $2,096 million in 2015. Severstal’s crude steel production in 2016 reached 11.6 million tonnes. www.severstal.com