Metinvest consolidates Kryvyi Rih mines, processing plants under unified mgmt
MOSCOW. April 3 (Interfax) - Ukrainian mining and steel group Metinvest has consolidated its mines and processing plants at deposits in the Kryvyi Rih iron ore basin under a unified management in order to optimize their operations.
"Metinvest is implementing a new work model for its Kryvyi Rih mining enterprises. A unified administrative and management center will manage Central, Ingulets and Northern GOKs [mining and processing plants] from April 2024. A mining and processing department has been established for this purpose under the Group's Operations Directorate," Ukrainian media reported Metinvest as saying.
The new directorate will be headed by Igor Tonev, who has also been appointed the sole general director of the three mining and processing plants.
"The plants will have a unified administrative team and functional managers," Metinvest said.
The new CEO was introduced to the employees of the Consolidated GOK on April 2. The transition process at the enterprises is expected to be completed within a few months, Metinvest said.
The group said it expects the new management model to "facilitate the creation of efficient end-to-end processes in all areas." Specifically, ore enrichment and iron ore concentrate production will be integrated into a common process chain for all the plants. The consolidation is also expected to increase the efficiency of reserves and inventory management at the plants. Due to low utilization rates, the plants have excess capacity and equipment that will be distributed among the group's production sites in Kryvyi Rih.
The creation of a unified management center is also expected to enable the group to optimize the common business processes of the enterprises and to centralize some service functions. This will significantly reduce administrative costs and therefore increase the economic sustainability of the plants, Metinvest said.
"Amid the current challenges, without objectively being able to bring the capacity utilization of the GOKs to the optimal level, we are seeking the effect of combining their capabilities and business processes. To this end, the Group sees its mining and processing plants not as separate capacities with separate teams, but as one large production site and one large team and seeks to leverage the advantages of each GOK in a single technological chain. The creation of a unified administrative and management center for managing the operations of the plants, the so-called Consolidated GOK, will significantly simplify, accelerate and increase the efficiency of these processes, as well as facilitate the creation of new synergistic connections between the enterprises," Metinvest CEO Yury Ryzhenkov was quoted as saying in the press release.
The group plans for each area of operations to have "one functional director and one department for all the GOKs within the unified management center, including, for example, production, finance, and procurement." However, each plant will retain its legal status, Metinvest said. The centralization of the management functions of the plants will affect only administrative personnel.
Tonev said the "main task facing the mining and processing team today is to sustainably increase operational efficiency while meeting production targets and ensuring the proper quality of products."
"The new operational model for the GOKs offers great opportunities for this. Whereas each GOK previously operated as a separate enterprise, now we are truly united as one big team. This also allows us to effectively redistribute personnel between the GOKs to promptly close deficits and replace third-party services, share the best practices, and implement them quickly," Tonev said.
Tonev, who joined Metinvest Group in 2011, previously served as head of sales company Metinvest-SMC from 2019.
Metinvest is 71.24% owned by SCM and 23.76% by Smart Holding.