Metinvest to invest USD 8.8bn for capital expenditure during next 10-15 years

Metinvest to invest USD 8.8bn for capital expenditure during next 10-15 years

The main part of the investment will be channeled into metallurgical assets, and the other will be absorbed by the mining facilities of the holding

Metinvest Holding will invest USD 8.8bn into modernization of production facilities by 2030, told Roman Kurashev the marketing director of the holding. Metallurgical capital expenditure will amount to USD 5.7bn while USD 3.1bn will be channeled for the needs of the mining facilities. At this, environmental issues will absorb approximately USD 500mln.

Commodity supercycle is at end, that is why demand for iron ore is shrinking fueling markups for steel, according to the top manager.

As of present, world steel capacities of 2.2bn tons are working at 70% of its output projections. It means that the metallurgical industry operates in a situation when supply exceeds demand. This trend will continue in the near future. As a result, the key to success remaining lower production costs.

In the frames of the investment plan, the holding intends to set up a casting and rolling unit at the Zaporozhstal metallurgy plant (Zaporizhya), and to carry reconstruction of steelmaking and rolling capacities at the Illich Steel and Iron Works and Azovstal.

In addition, the company plans to improve the production process of iron ore pellets.

Metinvest is a vertically integrated group of steel and mining companies that manages every link of the value chain from mining and processing iron ore and coal to making semi-finished products and finished products. In H1/2017, EBIDTA of Metinvest increased by 45% y/y to USD 839mln, according to the latest financial report of the company.

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