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Russia's IMH to supply 2 mil mt/year merchant pig iron after Tula Steel starts

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Russia's IMH to supply 2 mil mt/year merchant pig iron after Tula Steel starts

Russian steel and mining group Industrial Metallurgical Holdings is pressing ahead with new coking coal and iron ore mine expansions, while expanding pig iron production, reassuring the market it will still supply merchant product.

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IMH's Tula Steel will consume pig iron, as internal steel production starts up later this year.

Merchant pig iron production will be around 2 million mt/year after 2018 from around 2.2 million mt/year currently, IMH's vice president for strategy and communications, Sergey Frolov, said in a presentation.

Under the holding company's Koks Group, around 1.6 million mt of external coke sales are currently expected to take place, with the supply of 1.2 million mt of coke for internal pig iron production.



Growth in coking coal concentrate output at mines may help coke supplies meet higher pig iron output at upgraded blast furnace capacity in Tula, western Russia, Frolov said.

In Kemerovo's mining region, the Tikhova 1.5 million mt/year coking coal under the first stage was started in June, with 2.8 million mt/year targeted by 2022. The mine is tapping Zh-grade high-vol coking coal.

At the Butovskaya coking coal mine, expansion to the second stage of the project at 1.9 million mt capacity in 2017, from 1.3 million mt/year in capacity, is planned.

The company expects Butovskaya's full capacity utilization to reach 2.3 million-2.5 million mt/year, before reaching 2.7 million mt/year in 2021, to boost group coking coal self sufficiency.

Iron ore concentrate output at the group's KMAruda complex is planned to rise to 3.3 million mt in 2022 after the project starts in 2018. It produced 2.1 million mt in 2016.

At the new 1.8 million mt/year Tula Steel project, IMH intends to produce a mix of engineering long bars and rebar, investing in casters, rolling mills, ladle furnaces and other units to convert steel from pig iron supplied by IMH's Tulachermet.

Rebar production may be maximized at Tula Steel to allow the new steel plant to hit capacity, as sales in the value-added steel products are established and further lines are introduced, Frolov said.

--Hector Forster, hector.forster@spglobal.com
--Edited by Jonathan Fox, jonathan.fox@spglobal.com