NLMK approves 2nd phase of upgrading program

The Board of Directors of Russian steelmaker Novolipetsk Steel (NLMK) has approved the key parameters of the second phase of its Technical Upgrading Program (TUP), covering the period from 2007 to 2010. The program is intended to maintain NLMK's position among the world's most efficient steel companies. The first strategic goal of the program is to increase crude steel production from the current 9 million metric tons per year to 12.4 million metric tons per year by 2011. This goal will be achieved through construction of a new N7 blast furnace, with a capacity of 3.4 million metric tons per year, and also through the renovation of three out of five blast furnaces and Basic Oxygen Furnace (BOF) Shops N1 and N2. The second goal, outlined in the program, is the achievement of 100 percent self-sufficiency of the steelmaking segment in major raw materials through the development of the company's iron ore and coking coal assets. In addition, NLMK plans to increase capacity of flat rolled production from 5 million metric tons up to 9.5 million metric tons per year through the modernization of rolling facilities in Lipetsk, as well as through acquisitions of rolling facilities with a capacity of at least 3 million metric tons per year. Total investment will amount to $4.4 billion and will be financed from cash flow from operating activities and existing cash funds.