Annual Report & Accounts 2015

Construction of the new Mezhegeyugol mine

EVRAZ has been developing the Ulug-Khemsoye coal deposit since 2012. As part of this, it is building a new state-of-the-art mine, Mezhegeyugol, located far from any developed infrastructure or towns. This mine have few interesting features: it has an indoor distribution unit and is capable of handling up to 16 MW and a ventilation shaft, part of which runs at an angle to the mine entrance shaft of up 50 degrees. Due to be commissioned in 2016.

Mining & Coal Washing

Facility

Yuzhkuzbassugol (Russia)

Production facilities

Yuzhkuzbassugol has five coking coal mines in Novokuznetsk, in the Kemerevo region of Russia. They produce hard and semi-hard coking coal (Zh, GZh and KS grades), which is processed into high-quality concentrate (classified as HCC grade internationally). Most of this is produced in the new Yerunakovskaya-8 mine.

Yuzhkuzbassugol has two coal washing plants, which produce customised coking coal blends and pulverised coal injection (PCI) coal. The Kuznetskaya washing plant produces high-quality HCC concentrate for the domestic market. The Abashevskaya washing plant produces a wide variety of products whose quality matches specific customers’ needs.

Capacity

Output by mines in 2015, mt
Yesaulskaya Underground Zh 1.54
Ossinikovskaya Underground Zh 1.29
Yerunakovskaya-8 Underground GZh 2.23
Uskovskaya Underground GZh 2.29
Alardinskaya Underground KS 2.91
Total 10.23

Raspadskaya (Russia)

Production facilities

Raspadskaya has three operational underground coking coal mines and one open-pit mine in Mezhdurechensk, in the Kemerevo region of Russia. This complex includes the Raspadskaya mine, Russia’s largest. The operations produce hard coking coal (K grade), semi-hard coking coal (GZh grade) and semi-soft coking coal (GZhO grade). The coal from Raspadskaya is exported to premium markets, as is the coal from the Raspadsky open pit, whose output is flexible and can be easily adjusted according to market conditions.

Raspadskaya’s coal washing plant is one of the most modern in Russia. Maintainance costs are low and it can process high volumes with low human resources. If necessary, the plant can increase the volume of coal washed easily. In began third-party washing in 2014.

Capacity

Output by mines in 2015, mt
Raspadskaya Underground GZh 5.50
Razrez Raspadsky Open pit GZh/GZhO 3.50
MUK-96 (Put on care & maintenance in 2015) Underground GZhO 0.35
Raspadskaya-Koksovaya Underground K 1.00
Total 10.35

Mezhegey (Russia)

Production facilities

Mezhegey is a greenfield project in the Tyva region of Russia. The surface infrastructure was commissioned in December 2015. Mezhegey will have one underground mine, which will start production in 2016.

Capacity

Output by mines in 2015, kt
Mezhegeugol Underground Zh 242
Key developments 2015

Yuzhkuzbassugol

Mining

  • Mining of Zh-grade increased by 0.4 million tonnes year-on-year in 2015
  • Mining of GZh-grade decreased by 1 million tonnes year-on-year in 2015 due to delays in the schedule of longwall movements, but is expected to rise in 2016
  • Mining of KS-grade was up 0.2 million tonnes year-on-year in 2015
  • Output at all other mines rose due to productivity improvements

Production efficiency improvements

  • Output per face grew by 3% year-on-year
  • Longwall move times accelerated by 5%, reducing downtime
  • Development work accelerated by 5%

Raspadskaya

Mining

  • The Raspadskaya mine produced 5 million tonnes in 2015
  • The Raspadskaya-Koksovaya mine began production of K-grade coal

Production efficiency improvements

  • The Raspadsky open pit produced up to 380 thousand tonnes per month in the fourth quarter
  • Development work accelerated by 60% by transferring high-performance development teams from mine-recovery and repair arching work

Mezhegey

  • Preparations to launch the mine are 90% complete
  • The mine has used highly productive modern equipment to deliver the best development rate in the Group, achieving a maximum of 22 metres per day and 350 metres per month
R&D review

Based on its experience at the new Mezhegey mine, the Group intends to introduce modern tunneling equipment and increase the rate of development work at the Raspadskaya and Yerunakovskaya mines.

Outlook

EVRAZ expects to produce up to 20.6 million tonnes of raw coking coal in 2016. It will also work on reducing the ash content of its coal.

Key projects

Mezhegey

Construction completed, start of longwall mining

Status

In process

Raspadskaya-Koksovaya (K-grade)

Launch of production of K-grade/p>

Status

In process

Programme of water protection measuresAt the Uskovskaya and Raspadskaya-Koksovaya mines and also the Abashevskaya, Alardinskaya and Osinnikovskaya mines and the Abashevskaya washing plant.

Minimising the risks of penalties for discharge of pollutants above the norm (settlement agreement with Rosprirodnadzor)

Status

Completed