Severstal Announces Expanded Investment Program for 2011
02/22/2011 - OAO Severstal announced a target US $2 billion capital investment program for the current financial year, representing an approximately 48% increase over the level for 2010.
OAO Severstal announced a target US $2 billion capital investment program for the current financial year. The company said that its investments will help it continue to improve operating efficiency, modernize its operational facilities and ensure that the company maintains industry--leading standards of health and safety.
In 2011, the company will invest a total of approximately US $ 940 million at Severstal Russian Steel. The investment, which represents around a 73% increase on 2010, will include the following key projects: ongoing construction of a mini-mill in Balakovo in the Saratov Region, renovation of the No. 7 Coke Oven Battery, modernization of the No. 5 Blast Furnace, construction of a second polymer coating line in Cherepovets, and large-scale IT projects.
The company plans to invest a total of approximately US $ 650 million amount at Severstal Resources in 2011. That total, which represents around a 53% increase on 2010, will be used for modernization of production equipment across the division’s iron ore mills and coalmines, completion of a thermoelectric power station burning coalmine methane in Vorkuta, exploration of the Putu iron ore deposit in Liberia, and continued development of the division’s gold mining assets and a coalmine at PBS Coals.
The company also plans to invest approximately US $ 465 million at Severstal North America in 2011. The total, which represents around a 69% increase over 2010, will include construction, commissioning and start-up of the 2nd Electric Arc Furnace, Continuous Caster, Tunnel Furnace, Pickle line and the 2nd Hot Dip Galvanizing line at Severstal Columbus, as well as a new Cold Rolling Complex and Hot Dip Galvanizing line at Severstal Dearborn.
Overall, the level of capex represents an approximately 48% increase over the level for 2010.
“In 2011 Severstal will continue to make investments across its businesses in order to enhance our position as a market leader in the production of high added value products, improve our operational efficiency and reduce costs,” said Alexei Kulichenko, CFO of Severstal. “In Russia and CIS, steel use is estimated to increase by approximately 8% in 2011.”
