Retention of low-cost position

Efficiency and cost-cutting remain a primary focus for the Group. EVRAZ is on pace to generate improvements with an annual EBITDA effect of 3% of the cost of goods sold.

In 2020, the EBITDA effect from cost-cutting initiatives totalled US$192 million.

Breakdown of cost-cutting programme effect in 2020, US$ million

Steel segment

2020 key initiatives and results

  • EVRAZ NTMK successfully completed the reconstruction of blast furnace no. 6.
  • EVRAZ ZSMK increased its pig iron production to 6.2 million tonnes, its largest volume in 30 years.
  • Implementation of Repair function transformation projects in six pilot facilities.
  • EVRAZ KGOK continued to develop the Sobstvenno-Kachkanarskoe deposit, which is due to partly replace output from the Gusevogorskoe deposit.

2021 key initiatives

  • Re-equip EVRAZ NTMK’s ladle shop and improve the output of its blast furnaces.
  • Implement digital transformation projects for predictive analytics, digital BOF efficiency management and ferroalloy consumption optimisation.
  • Improve the efficiency of expert systems, developing predictive and advanced analytics.
  • Implement initiatives aimed at costs reduction of manufactured products.
  • Improve energy efficiency of the main shops.

Coal segment

2020 key initiatives and results

  • Launched production at the Uskovskaya mine’s new seam No. 48 and the Esaulskaya mine’s seam No. 29a.
  • Procured replacement of mining equipment for the Osinnikovskaya and Alardinskaya mines.
  • Acquired licence to develop the Kumzass open pit.
  • Continued to roll out EBS transformation projects on schedule.
  • Launched 11 digital transformation initiatives.

2021 key initiatives

  • Increase raw coal production volumes to around 25 million tonnes.
  • Develop K and Zh grades (HCC) production which are in high demand.

Steel, North America segment

2020 key initiatives and results

  • Improved operating efficiency of EVRAZ Regina’s pipe mills and steelmaking operations.
  • Optimised conversion costs across all production facilities.
  • Reduced general and administrative expenses as well as fixed costs.
  • Completed the upgrade of EVRAZ Regina’s reheat furnace, after which the mill was certified as meeting the new nitrogen oxide emissions requirements.
  • Continued the project to modernise equipment and expand production capacity at EVRAZ Regina in Saskatchewan and EVRAZ Red Deer in Alberta.
  • Launched EBS at EVRAZ Pueblo steelmaking operations.

2021 key initiatives

  • Continue EVRAZ Pueblo’s long rail mill project.
  • Complete the ongoing projects at EVRAZ Red Deer and EVRAZ Regina.
  • Continue the roll-out of EBS at the rest of the Pueblo site.