LLC “Zaporozhye Casting and Mechanical Plant” (ZLMZ), created on the basis of the production workshops of the department of the chief mechanic of PJSC “Zaporizhstal”, which is part of the Metinvest group, has resumed its work.
According to the company’s information on Sunday, earlier the Metinvest group decided to withdraw the main equipment of ZLMZ from the conservation regime, while before that only duty teams came to the workplace to maintain the equipment in proper condition.
“We have every reason to resume work: the military situation in Zaporozhye is under control, we have received both standard orders and unique requests from customers, so now we are making every effort to fulfill them,” the words of the acting are quoted in the message. Director General of ZLMZ Igor Dolgozvezda.
It is specified that the plant has resumed the work of the main divisions: a mechanical workshop, a metal structure workshop and a section for the production of shaped castings. Currently, the Zaporizhia Casting and Mechanical Plant is planning to produce and restore parts for Metinvest enterprises – Zaporizhstal, Kametstal, Metinvest Pokrovskugol and mining and processing plants of the Metinvest group. The company is also mastering the production of new types of products – spare parts for mining and lifting vehicles.
Yury Dmitriev, the head of the ZLMZ machine shop, pointed out that after the information about the resumption of production, the workers immediately expressed a desire to return to work, and some employees even began to return from abroad.
“Before the war, we worked on a day/night/48 or 5/2 schedule. Now our workers are ready to work around the clock to load the equipment to the maximum and produce the maximum product,” Dmitriev said.
Work shifts for employees have been adjusted to reflect the curfew. The enterprise provides centralized transportation of workers by corporate transport.
According to the decision of the company, the priority right to employment for open vacancies of scarce professions at ZLMZ is granted to specialists evacuated from Mariupol to Zaporozhye.
It is indicated that the company is gaining pre-war momentum and even working on new technologies so as not to depend on foreign supplies.
The press service also reports that ZLMZ employees, as volunteers, joined the work of the Center for the Coordination of the Humanitarian Mission of Metinvest in Zaporozhye from the first days of its creation, taking part in the reception, sorting and formation of cargo with humanitarian aid and coordinating the reception of internally displaced persons at social facilities companies in Zaporozhye.
LLC “Zaporozhye Casting and Mechanical Plant” (ZLMZ) was established on the basis of the foundry and mechanical shops, as well as the shop of metal structures of the plant “Zaporizhstal” in mid-2016. At the same time, the steel plant remains the main partner of the plant, which is a diversified enterprise with a closed production cycle.
ZLMZ specializes in the production of castings from cast iron, as well as from alloyed, low-alloyed and high-alloyed steels, metal structures and metal parts. The company produces a wide range of products, which includes molds for metallurgical plants, building structures, spare parts and prefabricated assemblies. The main consumers of the plant’s products are enterprises of the mining and metallurgical and other industries.
The plant is part of the Metinvest group, the largest mining and metallurgical holding in Ukraine. The main shareholders of Metinvest are the SCM group (71.25%) of Rinat Akhmetov and Smart Holding (23.75%) of Vadim Novinsky, who jointly manage the company.
Metinvest Mining and Metallurgical Group, owned by businessman Rinat Akhmetov, transferred $500,000 to a targeted charity fund for the purchase of protective ammunition and first-aid kits for the Territorial Defense Forces of Zapoprizhia.
“By uniting for the sake of defending the independence of Ukraine and Ukrainians, we are bringing victory closer. The army and the Territorial Defense Forces protect the civilian population, and we are trying to protect and support them in the struggle for state sovereignty, our freedom and independence,” head of the Metinvest Humanitarian Mission Coordination Center in Zaporizhia, director general of Zaporizhstal, Oleksandr Myronenko, who is quoted by the press service of the steel plant, said.
At the same time, it is noted that the Vadym Novynsky Foundation also transferred $500,000 in support of Zaporizhia Territorial Defense Forces.
The total contributions transferred to Zaporizhia Trust Charitable Fund will be used to purchase bulletproof vests, bulletproof helmets and NATO-standard first-aid kits for the defenders.
According to a press release, Metinvest Group has been supporting the Armed Forces of Ukraine and the Territorial Defense Forces in the cities where the company operates since the first days of the war. Since the beginning of hostilities, more than 35,000 anti-tank hedgehogs, as well as spiked chains against wheeled vehicles and anti-landing hedgehogs, have been made from Metinvest steel. With the support of the company, the construction of the city’s fortifications continues. Metinvest enterprises provide heavy special equipment and vehicles for the needs of defenders, as well as fuel, batteries and walkie-talkies.
Metinvest is a vertically integrated group of mining and metallurgical enterprises. Its enterprises are located in Ukraine – in Donetsk, Luhansk, Zaporizhia and Dnipropetrovsk regions, in European countries. In particular, in Bulgaria there is a Promet Steel plant with a capacity of 500,000 tonnes of rolled metal per year, in Italy – Metinvest Trametal and Ferriera Valsider with a total capacity of 1.2 million tonnes per year. In the UK, the company owns the Spartan UK plant, which can produce 200,000 tonnes of rolled steel per year.
The main shareholders of Metinvest are the SCM group (71.25%) of Rinat Akhmetov and Smart Holding (23.75%) of Vadym Novynsky, who jointly manage the company.
Ukraine’s largest producer of coking coal, PrJSC Pokrovske Coal, intends to increase production of coking coal by 2024 and process it into coal concentrate by 4.1 million tonnes, Kostiantyn Vialy, director of the coal directorate at the managing company of Metinvest Group, said.
According to him, 2021 was not an easy and difficult year for the company, however, it was possible to achieve fairly high production volumes.
“Albeit not at the level that was planned. We have something to be proud of and, we can say that we managed to create a reliable guarantee of success and stability in the future. Last year we passed a very good investment program for 2022. We are planning a powerful mining upgrade – mine equipment for sinkers. At the end of February, we expect the delivery of two Chinese-made combines. We plan to purchase two more combines at the end of the year. As for the overhaul, one combine has already been received, two more are ready to be sent to the plant,” Vialy said in an interview with a corporate publication.
At the same time, he expressed the hope that a certain breakthrough in the pace of mining will be achieved this year, which will make it possible to significantly increase the “cleaning front” and production volumes in the future.
At the same time, he added that the first suspended battery locomotive is being tested in the mine today – compared to diesel, it does not produce noise and exhaust gases. In the future, it is planned to gradually update the mine transport. This requires considerable investments, but if you look at the issue taking into account the prospects, they will definitely pay off – if not today, then tomorrow.
Answering a question about the problem with personnel, he noted that the shortage of personnel is a problem of the entire labor market, which has been observed for many years.
Speaking about the future of the company, the director stressed that the vision is positive and successful.
“With the support of Metinvest, we are developing production, building new blocks, improving labor safety, the professional level of our employees. Our plans are large-scale. It is important for us to provide intra-group assets that are part of Metinvest with our coal. We plan to reach the peak of mine workings in 2024, which will increase production and produce concentrate in the amount of 4.1 million tonnes,” the head of the coal directorate said.
Businessman Rinat Akhmetov in Mariupol, where Metinvest’s metallurgical plants are located, announced his intention to continue investing heavily in the modernization and development of this largest Ukrainian mining and metallurgical holding.
“We continue to build, we continue to invest. This year, Metinvest will invest $1 billion in new production,” he said.
“We will build a new university, we will do everything in our power to ensure that there is a decent job in Mariupol, a decent salary, and most importantly, a happy life for people,” Akhmetov added.
The meeting is also attended by MP Vadim Novinsky, who is a co-owner of Metinvest.
Metinvest CEO Yuriy Ryzhenkov said that a decision, which had been made this year earlier than usual, to increase the holding’s salary by 10% on average from March 1 is made.
Ryzhenkov said that Metinvest has currently planned its investment program at $1.3-1.5 billion per year over the next three or four years, further investments will depend on how the company develops the green metallurgy.
The decarbonization trend is focusing on the steel industry, he said. However, there are already well-studied low-carbon technologies for direct reduced iron (DRI) and electrometallurgy (electric arc furnaces). Metinvest’s efforts in the field of decarbonization are connected not only with the climate, but also with renewal and entry into new markets (in terms of efficiency and product quality).
The updated technology strategy that the company continues to develop suggests different scenarios, but each of them includes a transition to low-carbon operations. The strategic goal is to reduce greenhouse gas emissions by more than 90% by 2050 using a phased approach with key milestones in 2030 and 2040. The final stages of the strategy are expected to include the use of hydrogen.
Metinvest is the largest mining and metallurgical holding in Ukraine. The group’s enterprises are located mainly in the Donetsk, Luhansk, Zaporizhia and Dnipropetrovsk regions.
Metinvest’s main shareholders are the SCM group (71.25%) and Smart Holding (23.75%), which jointly manage the company.
Metinvest B.V. (the Netherlands), the parent company of the international vertically integrated mining and metallurgical group Metinvest, in 2021 increased payment of taxes by 2.4 times compared to the previous year, to UAH 52.7 billion.
According to preliminary data for 2021 released by the company, Metinvest Group, taking into account associated companies and joint ventures, transferred UAH 52.7 billion in taxes and fees to the budgets of all levels in Ukraine in 2021, which is 2.4 times more than in 2020.
At the same time, it is clarified that traditionally the largest payment is income tax. Last year, the Ukrainian enterprises of Metinvest, together with associates and joint ventures, replenished the state and local budgets by almost UAH 33 billion, which is more than six times higher than the year before last.
The second largest amount of payments is the social security tax, the payments of which in 2021 increased by 10% compared to 2020, to UAH 5.7 billion.
The third largest payment is personal income tax. Last year, Metinvest Group, together with associated and joint ventures, paid UAH 5.2 billion to the treasury of Ukraine, which is 11% more than similar payments in 2020.
At the same time, payment for the use of subsoil increased by a third compared to the year before last, to UAH 2.9 billion.
Significant sources of filling the state and local budgets in Ukraine in 2021 were also the environmental tax – UAH 894 million and land fees – UAH 857 million.
“The amount of taxes paid by Metinvest hit a record high last year. This was facilitated by a favorable market situation and improvement in the company’s operating efficiency. As one of the country’s largest taxpayers, we are pleased to do our part to support the country’s economy and the health and well-being of Ukrainians during the coronavirus pandemic,” Yuriy Ryzhenkov, Chief Executive Officer of Metinvest Group, said.
Metinvest currently has planned its investment program at the level of $1.3-1.5 billion per year over the next three to four years, further investments will depend on how the company develops green metallurgy, Metinvest Group CEO Yuriy Ryzhenkov said in an interview with Metal Expert. According to him, the decarbonisation trend focuses on the steel industry. However, there are already well-studied low-carbon technologies, including direct reduced iron (DRI) in combination with electric arc furnaces (EAF). Metinvest’s efforts in decarbonization are related not only to climate, but also to renewal and entry into new markets (in terms of efficiency and product quality).
The updated technological strategy, which the company is continuing to develop, involves different scenarios, yet each of them includes the transition to low-carbon operations. As for CO2-related objectives, the company’s strategic goal is to reduce greenhouse gas emissions by more than 90% by 2050, using a step-by-step approach with key milestones in 2030 and 2040. The final phases of the strategy are expected to include the use of hydrogen.
“In the meantime, today, unfortunately, there is still no method for producing cheap hydrogen in our country or anywhere else in the world. That is why we have set this timeframe, in the hope that a method will be found to produce cost-effective hydrogen,” the top manager said.
The plans are to increase efficiency and automate existing processes using DRI technology and electric arc furnace production at one of the factories: either in Zaporizhia or in Mariupol. Initially, it is possible to launch a new complex using natural gas.
“At the moment, we are still discussing its location, because we are not the only shareholder in Zaporizhstal, and, so far, we don’t see the willingness of the other party to participate in the development of the plant. So, there is still a ‘fork in the road’ as to whether Zaporizhstal should be an electric steelmaking plant or a cast-iron mill,” Ryzhenkov said.
According to him, for assets in Zaporizhia and Mariupol, they have already sent out requests for technical and commercial offers to major equipment producers and they are waiting for the results. “I think we will complete the feasibility study in the first half of 2022, and probably, by the end of the year, we will need to make a decision about the site where we will build the first facility,” Ryzhenkov said.
At the same time, conventional technologies, in his opinion, will remain, since it is unrealistic to immediately switch to a completely new production cycle and new technologies. “Even in Europe, from what we see of the plans of our peers, there is a gradual transition, and conventional technologies will remain in place for quite a long time – until 2040-45. But we should not forget that steelmakers in Europe will receive government support and financial incentives to introduce new technologies, while in Ukraine, we are trying to involve the state in this issue, but we have yet to receive any support. Therefore, it will be more difficult for us to achieve this goal,” the top manager said.
The Group is working to improve the quality of its raw materials, both iron ore and coke, thereby increasing the efficiency of the blast furnaces. In addition, by improving the quality of iron ore products, the company is preparing its raw material base for the next step: DRI.
According to the CEO, in 2021, Metinvest recalculated its Scope 1 emissions according to the new Ukrainian methodology, which was recently brought in line with the European approach. In 2020, direct greenhouse gas emissions (Scope 1) within the IFRS perimeter (i.e., excluding associates and joint ventures) amounted to 23.2 million tonnes of CO2 equivalent. In addition, the Group has calculated indirect greenhouse gas emissions for the first time (Scope 2). For 2020, they amounted to 2.7 million tonnes. The intensity of direct greenhouse gas emissions in 2020 from the Mariupol site was 2.4 tonnes of CO2 per tonne of crude steel produced.
“If we talk about the short-term outlook, our main investments will be directed at the production of high-quality raw materials at Northern Mining that can, in turn, be used further in green metallurgy, and they are estimated at almost $1 billion,” the CEO said, adding that one DRI module in combination with an EAF and casting costs at least EUR 1 billion. For the construction of a plant with a capacity of 4-4.5 million tonnes of electric steel, at least EUR 2 billion will be required.
“In order to change the technology completely, the estimated costs will be about $15-20 billion over the next decade. Here we need government support. But, today, there are not decarbonization programmes, or even any progress on developing them, in Ukraine. We aim to encourage the government to move in this direction,” the top manager said.
“We are now completing the calculations for the decarbonization roadmap and, I suppose, we will make it public in spring 2022. By the end of 2022, we expect to finalize our technological strategy… By 2050, we expect that our sinter production will be completely decommissioned, and we will switch to DRI with electric steel. By 2040, we intend, to a large extent, to substitute the old capacity with electric steel, but some will still remain in place,” Ryzhenkov said.
