METALS AND MINING INDUSTRY

USM is an active investor in the metals and mining industry. The holding company owns Metalloinvest, a leading global iron ore and hot briquetted iron (HBI) producer and supplier, as well as Baikal Mining Company, which controls the biggest copper reserves in Russia.
METALLOINVEST
  • Metalloinvest is the largest metals and mining company in Russia and the CIS region and holds the second-biggest iron ore reserve base in the world, amounting to c. 14 billion tonnes. The company is the HBI market leader and the second-largest manufacturer of pellets globally and is one of the top regional producers of high-quality steel. Its main production assets are located in the European part of Russia.
  • Metalloinvest operates two integrated operational segments. The mining segment comprises Lebedinsky GOK and Mikhailovsky GOK, and the steel segment incorporates OEMK, Ural Steel and Ural Scrap Company.
  • Lebedinsky GOK is the largest Russian iron ore mining and beneficiation enterprise. It is the only HBI manufacturer in Russia and Europe. Following the launch of its third HBI production facility in 2017 with a design capacity of 1.8 million tonnes per year, Metalloinvest can now produce up to 4.7 million tonnes of HBI annually, which puts the company’s share in the global HBI market at around 50%.
  • Mikhailovsky GOK is focused on the open-pit mining of the world’s largest proven iron ore reserves at the Mikhailovsky deposit of the Kursk Magnetic Anomaly. The plant’s main commercial products are iron ore concentrate and pellets. One of the most significant milestones in Mikhailovsky GOK’s history was the launch of Pellet Plant #3 in 2015, with a production capacity of 5 million tonnes of pellets per year.
  • OEMK is one of the most modern fully-integrated steel mills in Russia. It employs advanced technology for the direct reduction of iron and electric arc furnace smelting. The unique properties of OEMK's steel production have ensured stable demand domestically and worldwide.
  • Ural Steel is a fully-integrated metallurgical plant, including blast furnace, steelmaking and rolling manufacture. The majority of its output consists of merchant pig iron, pipe billets and strips, as well as bridge construction steel and heavy plates. The plant is a leader in niche markets of steel production.
  • Ural Scrap Company purchases, processes and delivers ferrous scrap to Metalloinvest's steel segment enterprises.
BAIKAL MINING COMPANY
  • Baikal Mining Company was established in 2008 to develop the Udokan copper deposit, located in the Kalar District of Russia's Transbaikal region, 30 km from Novaya Chara station of the Baikal-Amur railway. With resources of over 26 million tonnes of copper, Udokan is the third largest undeveloped deposit in the world and the biggest in Russia.
  • In 2014 the company carried out an international feasibility study for the Udokan development project, while two years later, the Federal Agency for Subsoil confirmed the copper reserves and associated components of the deposit. At the end of 2018, the Baikal Mining Company received a positive result from the state examination of the first stage of the project of the Udokan Mining and Metallurgical Plant, and immediately began the construction of a technological complex and necessary infrastructure. In 2023, the company plans to commission Phase I of the plant with 12 million tonnes of capacity per year and produce cathode copper and sulphide concentrate. The mine’s expected extraction period is 50-60 years.
  • In September 2019, the Baikal Mining Company commenced operations in the Zabaikalye territory of advanced development, which provided additional growth incentives for the entire region through the reconstruction of the airport in the village Chara, the formation of a logistics centre at the railway station and the construction of energy and civil infrastructure. The project is connected to major ports and transport hubs in the country's Far East by the Baikal-Amur Railway, benefitting from geographic proximity to key copper consumers in China, Japan and South Korea.
  • The development of the Udokan deposit is part of the Russian Metallurgical Industry Development Strategy until 2020 and is part of the Social and Economic Development Strategy for the Far East and Baikal Region until 2025. It is estimated that the project will create up to 2,500 jobs at the enterprise itself, as well as up to 20,000 positions in related sectors. The activities of the Udokan Mining and Metallurgical Plant will guarantee a contribution of up to 10% gross regional product of the Zabaikalye Region. The Udokan Mining and Metallurgical Plant will become the only fully-integrated copper ore hydrometallurgical processing enterprise in Russia.