8 Nov 2018 14:44

Steel maker NLMK planning maintenance capex of $400 mln annually in 2019-2022

MOSCOW. Nov 8 (Interfax) - NLMK is planning capex of $400 million annually for maintenance and extra repairs in the period 2019-2022, the steel maker said in materials.

Structural maintenance capex at $280 million-$320 million per year includes large-scale blast-furnace (BF) repairs at the Lipetsk site of $150 million per year on average, including BF#6 in 2019 and BF#4 in 2020, NLMK said in a presentation.

The capex estimates are preliminary, NLMK told Interfax, adding that more detailed information would be given at a Capital Markets Day in Q1 2019.

NLMK expects capex to total $650 million-$700 million in 2018, CEO Grigory Fedorishin said at the end of October. "In the third quarter, we increased capex compared with the second quarter. We are entering a period of significant maintenance. Therefore, capex will continue to rise in subsequent quarters. We confirm our forecast for the year at $650 million-$700 million," he said. NLMK "is entering a phase of rising capital expenditure," Fedorishin said. "The main cause is maintenance work we plan to carry out in the coming two-three years. This is in the first place reconstruction of two blast furnaces and two convertors. Capex next year will be higher than in 2018. However, the final amount will also depend on investment in development, which must be approved by the board of directors," he said.

NLMK also said in October that it had embarked on the construction of an additional beneficiation section at the Stoilensky iron ore mine. Project investment, including the development of the mine and Stoilensky transport infrastructure upgrades, will exceed 15 billion rubles.

NLMK, which has production facilities in Russia, Europe and the United States, has capacity to produce 17 million tonnes of molten steel per year, including about 16 million tonnes in Russia. The company's principal shareholder is Vladimir Lisin, who owns 84% of NLMK through Fletcher Group Holdings. The free float is 16%. Depositary Receipts on the company's shares (10 receipts representing one share) are traded on the London Stock Exchange.