20 Feb 2013 09:24
Severstal announces planned US$1.3 billion capital investment program for 2013
February 20, 2013, Moscow - OAO Severstal ("Severstal" or "the Company"), one of the world's leading vertically integrated steel and steel-related mining companies, announces that it plans to invest US $1.3 billion in 2013 to support its growth and long-term competitive strategy.
In 2013, planned investment at each division is as follows:
- Severstal Russian Steel: US $704 million
- Severstal Resources: US $525 million
- Severstal North America: US $107 million including US $60 million
invested in the maintenance program.
Investment at Severstal Russian Steel
Investment in development projects at Severstal Russian Steel will total US $268 million, and will include: completing the construction of a long product mini-mill in Balakovo in the Saratov Region; constructing and developing specialized steel service centers, including a steel service centre in Vsevolozhsk near St Petersburg; completing the construction of the second phase of Severstal-Gonvarri-Kaluga; modernizing operations and expanding the production portfolio at the Izhora Pipe Mill, and; reconstructing and modernizing operations at Orel plant (Severstal Steel Solutions).
US $106 million will be invested in IT projects at the division, while environmental projects will receive US $74 million investment. US $22 million will be invested in social projects, including the Severstal housing program.
Investment in the division's maintenance program, including health and safety projects, will be US $234 million.
Investment at Severstal Resources
Investment in development projects at Severstal Resources will total US $210 million, and will include: constructing inclined shafts at the Zapolyarnaya and Vorgashorskaya mines, (part of Vorkutaugol); increasing production capacity at the Pechorskaya Preparation Plant (part of Vorkutaugol); development of the Usinskoye deposit; geological exploration at Olkon, and expanding iron ore mining operations.
Investments in greenfield mining projects will not exceed US $46 million and will include US $40 million invested in the feasibility study for the Putu project in Liberia.
US $158 million will be invested in the maintenance of coal production operations, and US $111 million will be invested in the maintenance of iron ore production operations.
Alexey Kulichenko, CFO of Severstal, commented: "In 2013, Severstal will continue to invest in its long term development, with a primary focus on our Russian steelmaking and mining assets. We adopt a prudent approach to our capital expenditure, adjusting investment to market conditions and not raising new debt funds."
For further information please contact one of the following:
Severstal Investor Relations
Vladimir Zaluzhsky
T: +7 (495) 926-77-66
vladimir.zaluzhsky@severstal.com
Severstal Public Relations
Elena Kovaleva
T: +7 (495) 926-77-66
elena.kovaleva@severstal.com
***
ОАО Severstal is one of the world's leading vertically integrated steel and steel related mining companies, with assets in Russia, the USA, the Ukraine, Latvia, Poland, Italy, Liberia and Brazil, founded in 1993. Severstal is listed on MICEX-RTS and the company's GDRs are traded on the LSE. Severstal reported revenue of $15.812 million and EBITDA of $3.584 million in 2011. Severstal's crude steel production in 2011 was 15.3 million tonnes. Chief Executive of OAO Severstal - Alexey Mordashov. www.severstal.com