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Metinvest expands in-house production of coking coal

15 July 2011 // Press-service Metinvest

Metinvest (“the Group”), a vertically integrated metals and mining group of companies, today announced plans to increase its in-house production of coking coal, following the commissioning of Affinity Mine, owned by its subsidiary United Coal Company. The planned capacity of this coal mining unit will amount to 1.9 Mtonnes* of the highest quality coking coal, with the mine expected to achieve the production targets by 2012.

Total volume of coal to be mined at United Coal Company in 2011 is expected to increase by 14% to 8.2 Mtonnes. The volume of the US coal imports to Ukraine in 2011 is estimated at the level of 0.8 Mtonnes of clean coal, presenting a 250% yare-on-year increase.

Dale Birchfield, President of Affinity Coal Company, commented: “We are very pleased that this project, which will comprise four super sections and a state of the art preparation plant, has been fully completed on time. The mine’s opening ceremony is the culmination of joint efforts of our committed employees, contractors and the Norfolk Southern Railroad. We are particularly honoured to have the Board of Directors of Metinvest in attendance, and appreciate their confidence in this strategically important project.”

The new mine’s opening ceremony was attended by Mr. Earl Ray Tomblin; Acting Governor of West Virginia, Bill Raney; the President of West Virginia Coal Association, and the Mayor of Sophia Danny Barr, who thanked the management of Metinvest and noted the growing contribution of the coal company towards job creation and regional development in West Virginia.

Within the framework of Metinvest's Ukrainian coal assets development strategy, mining of coking coal is expected to increase by 7% to 6.2 Mtonnes in 2011, compared to 5.8 Mtonnes in 2010, and by another 5% to 6.5 Mtonnes in 2012. The modernization programme of Krasnodon Coal Company, the second largest coking coal producer in Ukraine, envisages implementation of the best HSE standards in addition to coal extraction expansion. In 2011, Metinvest intends to spend UAH 930 million (US$116 million) for these purposes, 1.3 times more than in the previous year.

Expansion of in-house high quality coal production is of especial importance for the Group, enabling Metinvest to strengthen its vertical integration and produce high quality coke in order to improve performance of its steelmaking plants’ blast furnaces.

Igor Syry, CEO of Metinvest, noted: «The provision of the highest possible quality raw materials is essential for the improved efficiency of our steel production and maintaining the high competitiveness levels of our finished products. High quality input is one of the prerequisites for the stable growth of our business, as well as the development of regions where we maintain a presence, and the whole of Ukraine.

* - here and below - raw coal, if not specified otherwise

Editorial notice:

METINVEST GROUP is an international vertically integrated steel and mining group of companies, operating assets in each link of the production chain from iron ore and coal mining and coke production, through to semi-finished and finished steel production, pipe rolling and coil production and production of other value-added products. The Group comprises mining and steel production facilities located in Ukraine, Europe and the USA and has a sales network covering all key global markets. Metinvest Group is structured into three operating divisions: Coke and Coal Division, Iron ore Division, Steel and Rolled Products Division and has a strategic vision to become the leading vertically integrated steel producer in Europe, delivering sustainable growth and profitability resilient to business cycles and providing investors with returns at above the industry benchmarks.
The major shareholders of the Company METINVEST B.V (a holding company of Metinvest Group) are SCM Group (71.25% ownership) and Smart-Holding (23.75% ownership) partnering in Company’s management.

METINVEST HOLDING LLC is the managing company of Metinvest Group.