Annual report and accounts 2012

Environment

Our position

Our Environmental Policy, developed in 2011, commits us to maintaining high standards for environmental responsibility by:

  • preventing environmental contamination, and participating in reduction of greenhouse gas emissions
  • optimising energy use and natural resources
  • managing wastes efficiently

We aim to comply strictly with all environmental laws which apply to us, and to develop and implement efficient management systems to follow best international practices.

We support the development of a system for constructive cooperation between government, work collectives, business partners, experts and the public in tackling environmental issues. Our managers work in partnership with the RUIE Committee on Environmental, Industrial and Process Safety. We also work with the World Steel Association (Worldsteel) to conduct research into climate change and reducing impact to environment.

Our action

In 2012, our Russian assets assigned more than US$100 million toward environmental protection. This is two times as much as in 2011. Responsibility towards the environment is at the forefront of our construction and modernisation projects, outlined below. We are also a member of the Sustainability and Environmental Committees of Worldsteel.

Our Cherepovets Steel Mill was the first company in the Russian ferrous metallurgical industry to develop and implement an environmental management system that satisfies the ISO 14001 international standard. In 2007, we successfully completed recertification under the new ISO 14001:2004. By the end of 2012, our major operational assets in Russia, Severstallat in Latvia, and the USA were ISO 14001 certified.

Severstal Russian Steel:

During 2012, we implemented around 70 significant environmental projects and initiatives across the Severstal Russian Steel division.

Our 2012 environmental programme at Cherepovets Steel Mill included a wide range of large-scale activities – more than 15 in total – to repair gas purification, aspiration, and water treatment facilities. Of these, about half are aimed at minimising atmospheric emissions, and focused on reducing dust and hydrogen sulphide content in ambient air at Cherepovets. We await the first results of this decreasing of dust emission, in 2013.

Between 2012 and 2016, investments in environmental projects aimed at reducing atmospheric emissions at the Cherepovets Steel Mill will total approximately US$183.3 million.

There are three major projects under implementation at Cherepovets Steel Mill focused on reducing inorganic dust atmospheric emissions:

  • An installation for capturing harmful emissions from converters #1-3
  • Emissions reduction at EAF production
  • Emissions reduction at sinter production

The result of these investment projects will be superior systems for cleaning waste gases in steel-making and sinter production:

  • In 2012, we proceeded with a large environmental project launched in 2011, for reducing atmosphere emissions from the converters #1-3. The project, with a total investment of over US$100 million, comprises construction of new bag filters, smoke exhausts, a compressor station, a package transformer and a distribution substation, an automated process control system, and a dust removal system.

Expected emissions reduction from the converters #1-3, tonnes per annum

  • Starting from the middle of 2012, another project to prevent dust emissions is underway at EAF #1 (electric arc furnace). By completely reconstructing the gas treatment facilities we hope to achieve the best available standards. Completion of this project is scheduled for 2014.

Emissions reduction at EAF production, tonnes per annum

  • By 2015, we will cut non-organic dust emissions across sintering production by 33%, by fully upgrading the aspiration system at one of operated units, with an investment of up to US$28.3 million.

Emissions reduction at sintering unit, tonnes per annum

Another project launched this year at a cost of approximately US$11.3 million, will enable us to reduce silicon dioxide emissions by 284 tonnes annually, through reconstructing the gas-cleaning units of the dolomite rotary kiln.

We have also set up production facilities to process coal tar from the Cherepovets coke production plant. These will supply premium quality chemical raw materials – pitch, naphthalene and technical oils – to the international market. The production facilities are run by Severtar, a joint venture with Rutgers, and will feature state-ofthe- art technology and comply with international environmental standards.

We are also working with the Moscow Institute of Steel and Alloys to reduce hydrogen sulphide emissions. We are taking 2,000 measurements in 180 tests to identify the principal emission sources. We have made several improvements in our technological approach, allowing a decrease in hydrogen sulphide levels in the ambient air. The aim is to hit emissions targets by the end of 2015.

In 2012, we allocated US$20 million toward water-protection measures. By 2013, we will have achieved a reduction of 200,000 cubic metres in the wastewater we discharge into bodies of water, by closing two of our five effluent outlets. This snow run-off and storm water from industrial areas will be channelled to the wastewater treatment station, to be fed into the closed-loop water circulation system, reducing the use of river water to replenish recirculation cycles.

Since our energy-saving programme started in 2000, we have reduced steelmaking energy consumption by 20%, down to 5.620 Gcal per metric tonne in 2011. The overall reduction is made possible by upgrading equipment, modernising systems, and using new energy-saving technology, to save fuel, oxygen and electrical power.

Izhora Pipe Mill

An investment of around US$2.5 million improved wastewater treatment facilities at the Izhora Pipe Mill. Lubricating fluids, key elements in metalworking processes, are removed, and the plant now recycles clean water, considerably reducing the negative impact on municipal waste treatment facilities and the environment.

Dneprometiz

Dneprometiz, a Ukrainian company of Severstal Metiz, launched a new section for non-acid removal of dross from the surface of wire products, thus creating healthier working conditions for the employees.

Dearborn

In North America, in September, we hosted a tour of the facilities for distinguished environmental groups, to demonstrate the significant environmental advances we have made in pollution prevention, air, water and energy control, and recycling.

Severstal Resources:

Karelsky Okatysh

Karelsky Okatysh is undertaking air protection initiatives to cut its gross harmful emissions by 23% by 2016, including a 12 thousand tonnes reduction in sulphur dioxide emission annually.

Vorkutaugol

At Vorkutaugol, this year we are completing the construction of two (11.6 MW and 5.8 MW, respectively) gas-fired reciprocating engines at Severnaya deep coal mine. When commissioned, the reciprocating engines will utilise around 28 million м3 coal mine methane to generate heat and power for the mine, which will result in the annual reduction of greenhouse gas emissions by 470,000 tonnes of CO2 equivalent. Following a cost benefit analysis of the Severnaya methane project, we may initiate similar projects at other Vorkutaugol coal mines.

In early 2012, Severstal received an Environmentally Responsible Business award as recognition of our environmental protection efforts, which were considered the best among all corporate members of the Russian Union of Industrialists and Entrepreneurs.