Annual report 2007 - Magnitogorsk Iron & Steel Works ...

ANNUAL REPORT OPEN JOINT-STOCK COMPANY MAGNITOGORSK IRON & STEEL WORKS
SEASON 2007
2010-2012 – Construction of an iron mine, grinding and sorting plant, and iron-ore dressing and pelletizing
plants.
2013-2016 – Ramp-up to the design capacity
The projected annual iron ore output will reach 35 million tons, while the production of commercial
concentrate and pellets will be 5.3 million tons and 8.2 million tons, respectively.
The location of the deposit is favourable in terms of availability of all resources required for the project
implementation, such as transport infrastructure, power and labour force.
In September 2007 an Agreement of Social and Economic Cooperation was signed between MMK and the
Government of the Belgorod Region within the framework of the project’s implementation.
Construction of a Steel–Making Plant in Turkey
(MMK- Atakas)
High economic growth rates, a stable political situation and a relatively low per capita consumption of steel
make Turkey an attractive market for steel producers. . Over the last 7 years steel consumption in the country has
grown at the average rate of 15 % per year, while steel production has been lagging behind at 8 %.
Construction work on the Iskenderun site started in 2007.
The Atakaş Group of Companies specializing in the Turkish coal industry, has become OJSC MMK’s partner for
the project implementation.
The Iskenderun site will accommodate a compact strip production (CSP) plant comprised of a 2.4 mtpy EAF
unit, a continuous caster and a rolling mill, a 750 ktpy cold rolling mill, a 450 ktpy galvanizing line, a 200 ktpy colour
coating line, a service center and a sea port. The Istanbul site will accommodate a hot dip galvanizing shop with
a capacity of 450 ktpy of galvanized sheets, a colour coating shop with a capacity of 200 ktpy and a steel service
centre.
The estimated cost of the project is USD 1.7 billion. The basic equipment supplier will be Danieli, Italy.
Acquisition of the Coal Mining Company Belon
In October 2007, MMK acquired a 10.75% stake in Belon positioned as a big, fast growing Group comprising
coal-mining and coal-preparation plants, an extensive network of steel warehouses in the Russian Federation,
construction materials factories and other auxiliary facilities including electricity generation plants. MMK is mostly
interested in the company’s coal division whose assets are located in the Kuznetsky Coal Basin in the south of
Western Siberia, in the Kemerovo Region. In March 2008, MMK raised its stake in Belon to 41.3%:
Overall, in 2007 Belon produced 2.0 million tons of coking coal and 2.65 million tons of steam coal. The output
of commercial concentrate was 3.5 and 0.5 million tons, respectively. Belon controls 6 % of the coal concentrate
market in the Russian Federation.
According to Belon’s investment program for the development of the coal division for the period from 2008 to
2011, production of coking coal will be go up to 7.9 m tons, and production of steam coal, up to 6.5 million tons.
Coal concentrate output will rise to 5.6 and 5.5 m tons, respectively.
OJSC Belon supplies will cover 55 % of MMK’s demand for coking coal.
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