-(220-x-200-px)-(130-x-130-px)-(220-x-200-px).jpg?lang=en-US&ext=.jpg)
.gif?width=200&height=200&mediaprotectionhash=ddb07947ad3b4ab959a83714461eccd5c6895f370695eb035a9ff7aa736f8ad9&ext=.gif)
MMK Approved for Joint Implementation Project within Kyoto Protocol Framework
01/21/2011 - The Russian Ministry of Economic Development has approved the Joint Implementation project “Implementation of arc-furnace steelmaking at Magnitogorsk Iron and Steel Works”. The project has been implemented in accordance with the rules of the Kyoto Protocol to the United Nations Framework Convention on Climate Change.
The Russian Ministry of Economic Development has approved the Joint Implementation project “Implementation of arc-furnace steelmaking at Magnitogorsk Iron and Steel Works”. The project has been implemented in accordance with the rules of the Kyoto Protocol to the United
Nations Framework Convention on Climate Change.
MMK’s partner in the Joint Implementation project is Carbon Trade & Finance (a joint venture of Gazprombank and Commerzbank) which will act as the buyer of all generated ERUs and provider of project development services.
MMK expects to receive additional (carbon) revenue of approximately 70 million EUR from the sale of ERUs in 2011-2013. The funds will be used to repay the project-related loans and to further finance the company’s modernization program up to 2013.
As a result Magnitogorsk Iron and Steel Works has received “project investor” status and is entitled to receive Emission Reduction Units (ERUs) as provided for by the flexible mechanisms of the Kyoto Protocol.
Joint Implementation mechanism, as defined in Article 6 of the Kyoto Protocol, gives Annex I countries the opportunity to invest in projects that reduce Greenhouse Gas Emissions in any other Annex I country (e.g. Russia) as an alternative to reducing emissions domestically. After approval of projects by designated state authorities of such countries, so-called Emission Reduction Units (ERUs) are issued for verified emission reductions. Such ERUs can be sold in the international carbon market. Implementing the project will provide MMK with additional revenues that will improve the economics of the project and partly compensates for the project’s costs.
From 2004 to 2006, Magnitogorsk Iron and Steel Works conducted a major reconstruction of its smelting facilities. The modernization project involved a complete switch to continuous steel casting and the replacement of open-hearth production methodology with state-of-the-art electric furnace steelmaking. The project has significantly increased the production capacity of Russia’s largest metallurgical enterprise. By replacing the outdated open-hearth furnace technology the company’s capacity to produce high-quality electrical steel (including profiled and slab grades) has increased from two million to four million tonnes.
At the same time the project will reduce the plant’s emissions of CO2 by seven million tonnes during 2008-2012, which is the largest reduction rate achieved in the Russian metallurgical industry.
Implementation of the project is a very important event for the Russian steel industry, as it has increased the company’s competitive position in the domestic and foreign markets. The project has also significantly reduced the energy consumption for steel production and lowered the plant’s emissions of pollutants.
OJSC MMK, one of the leaders of Russia's steel industry, is among the world's largest steel producers. The company's operations in Russia include a large steel-producing complex encompassing the entire production chain. MMK turns out a broad range of steel products with a predominant share of higher value added products, and its MMK-Atakas project in Turkey represents annual capacity of 2.3 million tonnes of flat steel. In 2009 the company produced 9.6 million tonnes of crude steel and 8.8 million tonnes of commercial steel products. In 2009, MMK Group’s revenue stood at USD 5.081 billion, EBITDA at USD 1.285 billion, and profit was USD 219 million.
