Retention
of low-cost position

EVRAZ’ assets are in the first quartile of global cost curves in semi-finished steel products and coking coal concentrate

Global steel slab cost curve, FOB in 2016, US$/t
Global coking coal cost curve, FOB in 2016, US$/t
Cost-cutting programme, Please see Additional Information for details US$ million

Average annual EBITDA effect from cost-cutting initiatives totalled US$316 million. Plan to keep the current pace of improvement with annual cost-cutting programme at the level of at least 2-3% from cost base.
Breakdown of cost-cutting programme effect in 2016
Cost savings in 2016 were focused on operational improvements, materials and services usage optimisation, as well as headcount reduction to improve productivity.

Key drivers

Cash cost of semi-finished products, Please see Additional Information for details US$/t
Cash costs of semi-finished products totalled US$185 per tonne in 2016, down by 4.7% from US$195 per tonne in 2015 due to operational improvements, volume stability and product mix optimisation.
Coking coal concentrate cash cost, Please see Additional Information for details US$/t
The Coal segment’s cash cost was US$30 per tonne in 2016, down by 2.5% from US$31 per tonne in 2015 due to increased volumes, mine optimisations, and G&A synergies.
G&A expenses, US$ million
G&A expenses have been reduced by c. 50% during the last three years, mainly due to the introduction of a new business unit management structure, the unification of administrative functions, office facility optimisations, general personnel reduction, and local currency devaluations. Further administrative cost reduction and simplification of the management structure are in the pipeline for the next couple of years.