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IT and AI can make metallurgy more environmentally friendly and efficient – Metinvest CEO

IT and artificial intelligence (AI) can make metallurgy more environmentally friendly and efficient, says Yuriy Ryzhenkov, CEO of Metinvest Mining and Metallurgical Group.

He expressed this opinion at the first B7 Italy 2024 meeting held on 13 March in Verona (Italy), organized by Confindustria, an association of Italian companies designed to facilitate dialogue between the business world and the governments of the G7 countries. The conference was attended by more than 250 guests, including CEOs and business leaders from G7 countries and international companies, as well as the Italian Minister of Entrepreneurship and Made in Italy, Adolfo Urso.

The participants discussed the key factors affecting industrial productivity and competitiveness in a rapidly developing global economy. Metinvest’s CEO was one of the speakers on the main discussion panel. He spoke about the peculiarities of steel production in Ukraine during the war, the company’s vision of a “green” course and the transformation of business processes in the steel industry through new technologies.

In particular, he noted that in recent years, many companies have been working on results and ignored technology. For example, in 2021, Azovstal outperformed all its competitors in terms of process efficiency thanks to AI and analytics.

“Our specialists, using augmented reality, could perform maintenance twice as fast as most of our competitors in neighboring countries. The implemented “space” computer vision system has set new standards for the quality of our products. Finally, the internal data management and communications system allowed us to run the company smoothly in the midst of the fiercest war in Europe since World War II,” Ryzhenkov stated.

He added that Metinvest, despite the war, is a very good example of how to use digital technologies to breakthrough in traditional industries.

Speaking about the “green” course in the industry, the CEO emphasized that almost every politician is interested in these issues, not only in Europe but also in the US, China, and around the world. At the same time, the steel industry is at the top of the agenda of this course as a major player in the implementation of green technologies. But at the same time, metallurgy is a very traditional industry, with technologies developed long ago, and it is impossible to make a major breakthrough now. It is only possible to gradually improve the system, he noted.

“The transition to the green course will not be easy. We do not have enough IT specialists to work on the transformation. Only five to seven years ago, we were looking for metallurgical engineers to teach IT. Now it’s the other way around. We train IT specialists who are taught metallurgy. And these are the people who will be in charge of our company’s green and digital transformation. This is happening right now. We will all be part of this transition, and we had better be ready for this challenge,” the top manager summarized.

“Metinvest is a vertically integrated group of steel and mining companies. The group’s enterprises are located mainly in Donetsk, Luhansk, Zaporizhzhia and Dnipro regions.

The main shareholders of the holding are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage it.

Metinvest Holding LLC is the management company of Metinvest Group.

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“Metinvest” sold more than half of its products in EU

Metinvest Mining and Metallurgical Group sold 55% of its steel and mining products in the European Union (EU) in January-June 2023.

According to the company’s presentation at the 15th J.P. Morgan Global Emerging Markets Corporate Conference, during this period, Metinvest sold 35% of its steel products in Ukraine, 2% in MENA, 1% in the CIS and 7% in other regions for a total of $2.423 billion.

In addition, the Group sold 28% of its iron ore products in Ukraine, 10% in Asia, and 7% in other regions for a total of $1.131 billion.

At the same time, in 1H2022, Metinvest sold 48% of its steel products in the EU (50% in 2H2022), 28% (35%) in Ukraine, 13% (4%) in MENA, 6% (1%) in the CIS and 5% (10%) in other regions for a total of $3.603 billion ($2.113 billion).

In addition, the company’s share of sales of iron ore products in the first half of 2022 in the EU amounted to 45% (60% in the second half of 2022), in Ukraine – 20% (27%), in Asia – 19% (2%), in other regions – 15% (11%) for a total of $1.669 billion ($903 million).

The presentation states that sales of steel products in 1H2023 decreased by 33% year-on-year, mainly due to a 54% and 56% decrease in pig iron and flat products production at Ukrainian steelmakers amid a lack of slab sales and a decline in average selling prices. This was partially offset by increased supplies of billets (up 3%) and long products (up 14%), as well as coke (up 10%), with higher resale volumes.

The positive six-month trend in 1H2023 compared to 2H2022 (up 15%) was driven by higher sales volumes of all products, including finished products (up 22%), semi-finished products (up 7%) and coke (up 18%).

At the same time, logistical challenges continued to shape the geography of sales.

Sales of iron ore products in 1H2023 decreased by 32% compared to 1H2022, mainly due to a 44% drop in iron ore prices and reduced supplies due to the blockade of Ukrainian Black Sea ports, as well as lower intragroup consumption and a drop in local demand. The results were also affected by the negative dynamics of prices for iron ore with an iron content of 62%. This was partially offset by an increase in sales of pellets and coking coal concentrate by 43% and 42%, respectively. This resulted in significant changes in regional revenue shares.

At the same time, compared to the second half of 2022, there was a positive trend (up 25%), primarily due to an increase in sales of all products, namely pellets (up 2.1 times), iron ore concentrate (up 56%) and coking coal concentrate (up 13%).

“Metinvest comprises mining and metallurgical enterprises located in Ukraine, Europe and the USA. Its major shareholders are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage it.

Metinvest Holding LLC is the management company of Metinvest Group.


“Metinvest” increased metal exports to Poland by 16% in 2023

Metinvest Mining and Metallurgical Group increased its exports of steel products to Poland by about 16% year-on-year in 2023 to over 800 thousand tons from about 700 thousand tons in 2022.

According to Yulia Mezentseva, Head of Logistics at Metinvest Polska, in an interview with the leading Polish publication Puls Biznesu, the increase in cargo traffic is facilitated by the unblocking of routes, but transshipment in ports and border crossings remain bottlenecks.

It is also noted that despite the war, Metinvest is expanding its operations in the Polish market.

“2023 was slightly better for us than the previous year. There were no more congestion and queues on the Polish railway network, which contributed to an increase in transportation efficiency. Compared to the previous year, we recorded a 16% increase in tonnage. We transported a total of 1.9 million tons through Polish ports and railways, of which about 1.3 million were steel products, 378 thousand were iron ore and 237 thousand were coking coal,” Mezentseva stated.

Out of the total volume of products delivered from Ukraine to Poland, 939 thousand tons were exported to other countries through Polish ports.

“The coal needed for our steel plants in Ukraine was also transshipped in Polish ports,” the manager said.

Some of the goods brought from Ukraine to Poland were delivered by rail or truck to Germany, the Czech Republic, Italy, Slovakia, and other countries.

Mezentseva clarifies that iron ore used to dominate the structure of supplies from Ukraine, but now it is mainly steel products that are imported. According to the country’s Metallurgical Chamber of Commerce and Industry, Ukraine is the largest non-EU steel supplier to Poland.

The head of logistics at Metinvest Polska predicts that in 2024, Metinvest will at least maintain and perhaps even slightly increase the volume of supplies of some goods to the Polish market. It assumes that their structure will change, especially the volume of steel imported from Ukraine.

For their part, local producers fear that if demand in Poland starts to grow, Ukrainian steel will flood our market. Przemyslaw Sztuchkowski, president of Cognor, even suggests introducing limits on the supply of steel products from Ukraine to the EU. The idea is to allow free transit through Poland to other countries and to ensure that the volume of imports on the Polish market does not threaten the stable operation of Polish producers.

At the same time, Mezentseva states. “In 2021, 1.2 million tons of our steel products were sold directly to the Polish market, 0.7 million tons in the previous year, and 0.8 million tons in 2023. Due to the war, we have limited opportunities to grow production and supplies,” she notes.

In addition, she draws attention to the problems with the transportation of goods across the Polish-Ukrainian border and transshipment in ports, which impede supplies to our market and transit by sea.

“The Polish-Ukrainian agreement stipulates that six trains a day with steel and ore should pass through the wide gauge at the Medyka border crossing. In practice, three or four are allowed through, as the Polish border and railroad administrations give priority to other transport. Therefore, we often have to wait for a long time at the border, which increases our costs. For every hour of downtime, we have to pay CHF 1.9 per commercial wagon,” says Mezentseva.

She suggests that one of the reasons for the long queues at the border could be the recent protests by Polish carriers and farmers.

“The queue on the Ukrainian side sometimes reached 70 kilometers. In the case of delicate goods that needed to be delivered quickly to customers, we sometimes decided to change modes of transportation and transfer goods from cars to trains to avoid standing in a very long line,” says the manager.

She hopes that the suspension of the protests will facilitate uninterrupted transportation by road and rail. She emphasizes that after crossing the border, transportation through Poland is quite efficient.

“In 2022, we often had to wait on the access roads, but now PKP PLK has significantly improved the capacity of the roads leading to the ports,” says Mezentseva, adding that access to the terminals is almost hassle-free, but there are difficulties with transshipment.

“Bulk cargo, such as iron ore and coal, is transshipped much faster than steel products. Transshipment in Polish ports is four times slower than at Black Sea terminals,” Mezentseva said.

According to her, one of the reasons for this may be the lack of staff at the terminals.

The Metinvest representative also points out that Polish customs regulations do not take into account changes in the weight of bulk cargo during transit. However, they can occur, for example, due to weather conditions. Therefore, employees of transportation and transshipment companies have to spend a lot of time during inspections explaining that coal or ore may weigh a little more in rainy weather. There may also be so-called natural losses during transportation.

“Railroad rules allow a certain percentage of deterioration for different groups of goods. Customs rules, on the other hand, do not allow any losses that are subject to individual inspection by the service. For us, this means significant losses,” emphasizes Mezentseva.

Metinvest Group notes that it is interested in building long-term business relations in the Polish market.

“We are talking about challenges, but we are ready to work out solutions together with the Polish side. We want to simplify procedures and transportation,” adds the Head of Logistics at Metinvest Polska.

“Metinvest is a vertically integrated group of steel and mining companies. The group’s enterprises are located mainly in Donetsk, Luhansk, Zaporizhzhia and Dnipro regions.

The main shareholders of the holding are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage it. Metinvest Holding LLC is the management company of Metinvest Group.

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“Metinvest” produces targets for military training

Metinvest Mining and Metallurgical Group has started manufacturing targets for military training at its Kryvyi Rih plants as part of Rinat Akhmetov’s Steel Front military initiative.

According to the company’s press release, Ukrainian defenders must maintain a high level of professional knowledge and skills to effectively fight the enemy at the front. In particular, in the use of small arms. To enable the military to systematically practice and improve their skills, Metinvest’s enterprises in Kryvyi Rih have started producing targets.

At the same time, Metinvest’s Kryvyi Rih facilities have manufactured and delivered approximately 30 target models at the request of the military. All of them have previously been successfully tested at training grounds.

The specialists have now mastered the production of three types of targets: Gong, Popper and Tree. They consist of sturdy frames on which the target is hung. Target equipment parts can be replaced as needed by installing new components on the frames.

As part of the Steel Front military initiative, Metinvest is implementing a number of initiatives aimed at improving the military training of the Ukrainian army. The company has become a partner in the construction of a mine action center in Chernihiv Oblast, which will provide training for more than 3,000 sappers. In addition, Metinvest is developing tactical medicine in Ukraine in cooperation with the PULSE charity foundation. Over UAH 13 million has been allocated to organize training for military personnel in the combat zone.

“Metinvest is a vertically integrated group of steel and mining companies. The Group’s enterprises are located mainly in Donetsk, Luhansk, Zaporizhzhya and Dnipropetrovsk regions. The main shareholders of the holding are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage it. Metinvest Holding LLC is the management company of Metinvest Group.


“Metinvest” has built 35 steel bunker headquarters for Armed Forces of Ukraine

Metinvest Mining and Metals Group has built 35 steel bunker headquarters for the Armed Forces of Ukraine (AFU) as part of Rinat Akhmetov’s Steel Front initiative and plans to produce another 90 bunkers.

Metinvest’s Chief Operating Officer Alexander Mironenko told Pryamyy Kanal that the group has joined the fortification program that is underway in virtually all frontline areas, and is actively building the second and third defense lines with platoon strongholds.

“These points use our shelters as standard, and we have already delivered more than 330 units to our army. And the question arose that we also need to make command posts to ensure continuous control of troops near the contact line. After that, we had a very meaningful discussion with the military, with the command in certain areas. And we have developed a project of the command post – they must meet the following requirements to ensure a comfortable stay of the leadership near the positions and continuous command of the troops,” explained Myronenko.

He clarified that the points must be provided with uninterrupted communication, so they are equipped with Internet, telephone and all other means used by the military. In addition, there should be places where online operators can watch what is happening on the contact line. There are people who monitor video from reconnaissance drones flying along the front line. There are people who monitor how the enemy’s positions and our positions are changing, what kind of fighting is going on at the moment on the contact line. This is all done using large screens and computer equipment, which Metinvest also provides.

The stations are located deep underground for the safety of the military, they are electrified and equipped with stationary heating places, as well as a modern ventilation system that prevents air from stagnating.

The stations are set up mostly at night – they have to be delivered secretly, the place prepared – dig a hole, place them there, make communication lines, fill them up, cover them with several layers of wood. All this requires quite significant security measures, which the company takes together with the military: “They prepare the infrastructure, and we come and install the ‘shelters’ and help with the arrangement.”

“About production: it takes 4-5 weeks to prepare 5-6 shelters, including steel production, assembly of the structure and interior arrangement. The finished structure can be loaded onto a truck, delivered, unloaded and buried. (…) The main purpose of these points is to continuously control troops in a safe environment. If they are properly installed (…), they provide protection against artillery hits of up to 152 caliber,” the top manager explained.

He also emphasized that these control centers are very much needed now, and the company continues to produce them – currently, about five more are in the process of being assembled, which will be distributed to the areas and brigades at the front line. The next stages of production are currently being discussed.

“All the sites where the products are manufactured, including mine trawls, command posts and hideouts, are located outside our facilities. We care about the safety of people working at these sites. In total, about 400-500 employees of Metinvest are constantly involved in the production of defense products. There are opportunities for expansion for almost all types of products, but we are currently limited in the number of people we can employ in this production. (…) We are trying to work closely with the Ministry of Economy and the Ministry of Defense,” said the COO.

Currently, the main areas of focus are mine clearance (mine trawls) and the provision of shelters and fortifications, as well as their modification. The production of “hideouts” for drone operators is currently being discussed, and another area is being developed, which concerns stabilization medical centers.

“I think in a month or so we will be able to show in more detail what it is and how our medics will be able to use it – the medical stations are currently under development, and we will soon make the first one,” Myronenko summarized.

Italy signs agreement with Metinvest to develop metallurgy in Pombino

The Italian Ministry of Business and Production, the Tuscany region and the municipality of Pembino have signed a Memorandum of Understanding with Metinvest Mining and Metallurgical Group to develop the metallurgical sector in the region.

According to official information from the Italian Ministry, the memorandum was signed with Metinvest Adria SpA, Metinvest B.V., Danieli & C. Officine Meccaniche SpA, to ensure conditions for the restart of the steel plant in Piombino.

It is specified that this is “a decisive step for the restart of the Pembino site, which will play an increasingly central role in the national steel industry plan.”

It is also reported that the purpose of the industrial project is to develop, construct, own, operate, and maintain an environmentally sustainable plant for the production of finished steel products derived from the processing of ferrous metals into hot-rolled coils for further processing, which will be built in Pembino on an area of approximately 260 hectares. The project will be financed through external financing and government grants.

The Pembino steel complex is one of the main steel processing centers in Italy and Europe, and the Ministry of Business and the Made in Italy project aim to support the resumption of rail production and simultaneously launch the production of hot-rolled coils in order to restore operations, preserve employment and reduce imports of steel products to Italy from non-EU countries. This has renewed interest in the feasibility of the integrated industrial development project presented by Metinvest Adria S.p.A., Metinvest B.V. and Danieli & C. Officine Meccaniche S.P.A., the ministry said in a statement.

The signatories to the agreement undertake to immediately conduct an agreed feasibility study aimed at determining the conditions for stable and long-term operation of the hub, as well as increasing the industrial and production potential of the territory, giving preference to solutions that are most compatible with the urban environment.

When fully operational, the project will employ about 1,500 direct and indirect workers and will have a significant economic impact on other related industries at the regional and national level, the information says.

The Ministry of Business and Made in Italy will coordinate a working group involving all competent national and local institutions to stimulate the creation of manufacturing plants.

Potential investors: Ministry of the Environment and Land and Sea Protection, Tuscany Region, Municipality of Piombino, Port, System Authority, State Property Agency.

The Protocol defines the conditions for concluding a Program Agreement within four months in accordance with Article 252 bis of the Consolidated Environmental Law.

Italian Minister of Business and Production Adolfo Urso said that “the agreement marks a decisive step towards the restart of the Pembino complex, which will play an increasingly central role in the context of the national steel industry plan, together with Taranto, Terni and the steel mills of northern Italy.”

Eugenio Giani, President of the Tuscany region, added that “the memorandum of understanding is the first and necessary signal of the investment proposed by Metinvest and Danieli, as well as a concrete sign of cooperation between the institutions to guarantee the future of steel production in Italy.”

“Tuscany is a land open to foreign investment, and the Pembino region has been favored by metallurgy since the Etruscan times. The Metinvest-Danieli project will have the support of the Tuscany region. (…) We hope that another investment project of JSW Steel Italy can also be realized, given the interdependencies and possible complementarities between the production of flat products (by Metinvest) and long products (by Jsw). We have guaranteed significant investment in the port and infrastructure, an opportunity that the Metinvest-Danieli duo has clearly recognized, and we will work over the next 4 months to reach a binding programmatic agreement with a timeframe for all,” explained Giani.

Pombino Mayor Francesco Ferrari said that “this agreement is a real opportunity for a restart that will return Pombino to the center of the national and international steel industry.”

Yuriy Ryzhenkov, CEO of Metinvest B.V., said: “The agreement with the Ministry of Enterprise and Made in Italy marks a significant step towards creating one of the greenest and cleanest plants in Europe.

“This project, with a capacity of about 3 million tons of steel, will play a crucial role in Italy’s transition to green technology by introducing sustainable and environmentally friendly industrial methods. In addition, it will help to increase the utilization of our iron ore mining and processing facilities in Ukraine, leading to their modernization to produce high-quality pellets. Pembino is a cutting-edge project that, once completed, will become a real example of how cooperation between foreign industrial groups and Italian institutions can yield positive results,” Ryzhenkov emphasized.

Danieli Group President Gianpietro Benedetti said that “this agreement is the first important result that will lead to the creation of a plant that will be one of the first fully digital and will have an important positive impact on employment.”

“Metinvest is a vertically integrated group of steel and mining companies. The Group’s enterprises are located primarily in Donetsk, Luhansk, Zaporizhzhia and Dnipro regions.

The main shareholders of the holding are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage it.

Metinvest Holding LLC is the management company of Metinvest Group.

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