MMK.L Regulatory News (MMK)

Open Joint Stock CompanyMagnitogorsk Iron and Steel Works(MMK)

July 16, 2012, Magnitogorsk

Magnitogorsk Iron & Steel Works (MMK) launched the second stage of its new cold rolling complex today in the presence of Russian President Putin

The complex, capable of producing 2 mtpa of finished products, will primarily produce high-quality cold-rolled and galvanized steel to be used in the production of exterior and interior car parts, as well as for use by home appliance manufacturers and the construction industry. MMK's total investment in the project is RUB 44.5 billion, including the cost of the equipment - €490 million.

The decision to build the cold rolling plant for producing world-class automotive body parts was made by MMK Board of Directors Chairman Victor Rashnikov in February 2007. The need to launch new capacity emerged with the increase in demand for high-quality cold roll products, primarily from car makers.

The contract to deliver the equipment for the first stage of the cold rolling complex - the Mill 2000 - was signed by MMK in July 2007 with the German machinery maker SMS-DEMAG.

Construction began in March 2008. In July 2011 the first stage of the complex (a continuous turbulent pickling line linked to the five-stand cold-rolling Mill 2000) came on line, with Vladimir Putin participating in the launch ceremony. He noted the significance of this project to Russia's entire industrial sector.

The new cold rolling facility (Rolling Workshop No. 11) is equipped with a continuous turbulent pickling line linked to a five-stand cold-rolling mill with a capacity of 2.1 mtpa, a continuous hot galvanizing unit (450 ktpa), a combined annealing/hot-galvanizing unit (650 ktpa), a working roll grinding and texturing unit, a coil inspection and slitting line, as well as cold-worked and galvanized coil packaging lines. The gauge of finished products can range from 0.28-3.0 mm thick and 850-1880 mm wide cold-rolled sheets in coils weighing up to 43.5 metric tons. The production capacity of the new complex is as follows: 700 kt of galvanized steel, 400 kt of cold-rolled products, 900 kt of cold-worked coils. The maximum mill speed is 1500 m per minute.

According to plans, by the end of the current year the complex will attain full capacity. Through the realization of this project, MMK will increase the share cold-roll and hot-galvanized products in its sales portfolio, expand its assortment of high-grade products and provide automakers with high-quality cold-roll and galvanized sheet metal, including such high strength grades as HSLA, IF-HSS, BH, two-phase, multi-phase and TRIP steel, corresponding to all the modern requirements for such products.

The new cold rolling complex is situated on a 155,000-sqm territory - covering the equivalent of more than 20 soccer fields. The complex stretches approximately 2 km in length and the main equipment installed alone weighs 40 kt. The construction of the plant required 150,000 cubic meters of reinforced concrete and 54 kt of metal structures. At times the construction of this gigantic facility required the efforts of up to 2500 construction workers.

According to MMK Chairman of the Board Victor Rashnikov, "with the launch of MMK's cold rolling mill, both Russian and foreign automakers working in this country will have the opportunity to use Russian milled steel products which meet the highest world standards."

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