RETENTION
of low-cost position

Continuous focus on efficiency improvement

The implementation of an efficiency improvement programme in the Steel segment continued in 2016. More efficient use of raw and basic materials saved US$41 million. Payroll expenses were also cut by US$40 million. Productivity growth generated an additional US$26 million. Reduction of G&A costs saved US$7 million. A reduction in auxiliary material consumption and the use of industrial services helped lower costs by US$4 million. Repair work optimisations led to an additional cost savings of US$0.4 million. Asset optimisation lowered expenses by US$0.4 million.

Additionally, a series of measures were undertaken to reduce energy costs by US$16 million. See more on Energy-saving measures page.

The main cost-reduction programmes

Reduce pig iron production costs by 5% (combined initiative at EVRAZ NTMK and EVRAZ KGOK)

Actions in 2016:
Fe content in the sinter were increased and the coal charge was optimised.

Reduce pig iron production costs by 5% (combined initiative at EVRAZ ZSMK and Evrazruda)

Actions in 2016:
Increased concentrate output at the processing plant, coal charge optimisation, involvement of slag in the production line.

Continuous casting machine (ССМ) reconstruction at EVRAZ ZSMK

Actions in 2016:
Construction completed.

Competitive iron ore production cash cost

A key event in 2016 was the increase in iron ore production volumes at Evrazruda’s Sheregesh mine following the implementation of an investment project. Primary concentrate production totalled 2.8 million tonnes for the year, which is a new record for the mine.