6 Feb 2014 10:31
Severstal announces capital investment program for 2014
February 6, 2014, Moscow - OAO Severstal ("Severstal" or "the Company"), one of the world's leading vertically integrated steel and steel-related mining companies, today announces details of its investment program in 2014 to support its development strategy and long-term competitiveness.
Severstal plans to invest US$976 million across the Company in 2014 with a continued focus on key elements of its strategy, specifically: enhancing operational efficiency; reducing operational and administrative costs; further improving the product mix; customer care, and; continuous improvement to health and safety. Planned capital investment in environmental projects in 2014 is about US$68 million.
Severstal Russian Steel
Planned investment at Severstal Russian Steel in 2014 is approximately US$487 million including investments in central IT capabilities. US$150 million of this will be invested in development projects including completion of constructing a long product mini-mill in Balakovo (Saratov region), revamping of four-stand continuous tandem cold rolling mill 1700 in Cherepovets, the completion of the development of a specialized steel service center in Saint Petersburg and the continuing reconstruction and modernization of the Orel Plant (Severstal Steel Solutions).
US$288 million will be invested in a combination of maintenance and health and safety improvement projects at the division in 2014.
Resources
Planned investment at resources operations in 2014 is approximately US$404 million. US$195 million of this will be invested in development projects including the operational consolidation of the Vorkutaugol's Zapolyarnaya and Vorkutinskaya mines including the construction of an incline shaft at Zapolyarnaya, the construction of a new water rotation unit and enhancing stripping works at Karelskiy Okatysh, further progress on increasing production capacity at the Pechorskaya Preparation Plant and others.
Spending on the maintenance of coal and iron ore operations and health and safety improvement projects are planned to be US $209 million.
Severstal North America
Planned investment at Severstal North America in 2014 will be approximately US$85 million and investment in maintenance projects is anticipated to be US$73.
Alexey Kulichenko, CFO of Severstal, commented: "Severstal maintains a prudent approach to capital expenditure, which is flexible to market conditions and determines that we invest only in development projects that meet our strict criteria on returns. Our 2014 investment program will enable us to further enhance Severstal's efficiency and continue to generate healthy free cash flow whilst developing our market-leading product and service standards."
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
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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 and Liberia, founded in 1993. Severstal is listed on MICEX-RTS and the company's GDRs are traded on the LSE. Severstal's crude steel production in 2013 was 15.69 million tonnes. Chief Executive of OAO Severstal - Alexey Mordashov. www.severstal.com