Russia-based Industrial Metallurgical Holding (IMH) has announced that it has completely switched to using its own iron ore concentrate for the production of pig iron, effectively eliminating outside ore purchases.
According to the company, this step allows them to cut procurement costs, reduce dependence on market volatility and lower the production cost of their pig iron output.
Full self-sufficiency achieved, large cost savings expected
IMH declared that, by ramping up ore extraction and concentrating capabilities at its in-house mines, it has reached full self-sufficiency in iron ore raw materials. Financial savings from the switch are estimated at over RUB 17 billion in 2025 alone.
The move ensures that pig iron producer Tulachermet (a part of IMH), sources iron ore exclusively from the holding’s in-house mining assets.
Strategic rationale: stability, cost control and vertical integration
IMH has framed the decision as a strategic shift toward vertical integration and industrial resilience. Using own ore gives it:
- independence from external raw material markets and price fluctuations,
- lower production costs and improved margins,
- secure supply for pig iron,
- enhanced control over raw material quality and production continuity.
Industry-wide significance
In a period of volatility for global raw material markets - with rising ore prices and supply chain challenges - IMH’s transition highlights how integrated mining and metallurgy holdings may gain an advantage through full internal sourcing.
It may also influence other producers, especially in regions where ore and pig iron supply chains are fragmented, to consider similar vertical integration strategies to ensure long-term stability and cost competitiveness.
