March 3, 2020

Severstal discloses 2020 environmental investment plan

PAO Severstal, one of the world’s leading vertically integrated steel and steel-related mining companies, announces its plans to invest plan approximately 1.1 billion roubles in environmental projects in 2020. The investment will cover a full environmental refurbishment programme at Severstal’s main assets to further reduce the Group’s environmental impact.

671 million roubles will be invested in environmental refurbishment at the Cherepovets Steel Mill (CherMK, part of Severstal’s Russian Steel division) in 2020. A key project to improve air quality will be the technical refurbishment of the solid fuel preparation unit in sinter shop No. 3. This will contribute towards Russia’s federal Clean Air project, which is part of the national Ecology project, and is expected to reduce Severstal’s carbon monoxide emissions by 5,846 thousand tons annually.

In addition, in 2020, the CherMK coke-and-gas plant will complete metrological certification for its system of monitoring the particle composition of exhaust gases from the sintering machines. The automatic system will enable the plant to monitor its agglomeration technology in real-time. The real-time monitoring will involve specialists measuring the process parameters and the concentration of agglomeration-specific substances online. Once the system is fully installed and the real-time agglomeration technology monitoring is up and running, the plant expects to reduce its pollutant emissions by 2,579 thousand tons annually.

Severstal-metiz plans to invest 30 million roubles in the Orel steel rolling plant. The majority of the investment is aimed at improving production technology, which will reduce its impact on the environment, primarily by reducing acidic effluents.

406 million roubles will be invested in the Company's Resources businesses in 2020. In 2020, Vorkutaugol will allocate 87 million roubles towards the full or partial modernisation of treatment facilities at all of its current mines and the Vorkuta mechanical plant.

Environmental investments at Olkon this year are planned to total 39 million roubles; six of the 17 aspiration systems at the crushing and processing plant are due to be replaced, and a full replacement of the remaining systems is scheduled over the next three years. Funds will also be used for building treatment facilities with modern treatment systems for wastewater releases in the quarry named after the XV anniversary of the October Revolution, and in the Komsomolsk quarry.

In 2020, the construction of a pilot desulphurisation plant will begin at Karelsky Okatysh, which will capture sulphur dioxide formed after firing pellets. The company is also launching two water conservation projects: treating quarry water using a natural component – peat substrate, and the construction of a closed circuit of the tailings storage facility, to minimise discharges into water bodies. These projects are expected to be developed over several years. In 2020, Karelian Okatysh will invest over 193 million roubles in environmental initiatives.

Yakovlevsky GOK will invest approximately 87 million roubles in environmental initiatives in 2020. Its primary focus will be on developing a technological solution to purify mine water. The Company is currently working on the design of experimental phyto-treatment facilities. Once industrial tests have been completed, based on the effectiveness of the technology plans will be drawn up for further rollout.

Alexander Shevelev, CEO of Severstal, commented:

"Severstal is committed to achieving a balance between our economic goals and our responsibility to the environment. All of our investment projects include both an environmental impact assessment and a list of measures to minimize this impact. As a result, in 2019, Severstal Russian Steel reduced its emissions of atmospheric pollutants to 280.3 thousand tons, compared with 301.7 thousand tons in 2018. We have also achieved progress at Severstal Resources, where we have reduced these emissions, to 214.3 thousand tons in 2019 compared with 220 thousand tons in 2018. The projects we are investing in this year will further improve our environmental performance. We recognise that openness and transparency on environmental issues are important to our stakeholders, and we commit to transparent disclosure on our activities and their results. The Step Up programme we are running with Worldsteel will be a particular focus, as this will enable us to identify opportunities to reduce CO2 emissions at the Cherepovets Steel Mill thanks based on our ongoing study using the Worldsteel benchmarking system.” on our ongoing study using the Worldsteel benchmarking system.”