OREANDA-NEWS. Alexey Mordashov, Chief Executive Officer of OAO Severstal, one of the world’s leading steel and steel-related mining companies, has today completed a two-day working visit to Vorkuta. The primary purpose of the visit has been to review the development plans for Vorkutaugol, one of Russia's major coal miners and an integral part of Severstal.

Alexey Mordashov’s visit to Vorkuta began with a presentation to the company's employees at the Pechorskaya Central Coal Cleaning Plant, Vorkutaugol's largest coal breaker. The key themes of the presentation included: occupational safety; production; improving operating efficiency; and cost reduction. Mr. Mordashov claimed that a focus on all of these areas, augmented by suitable investment, will ensure Vorkutaugol's sustained and steady growth.

These topics were also at the center of discussion at a meeting chaired by Mr. Mordashov and attended by Vadim Larin, CEO of Severstal Resources, as well as the heads of the Resources Division’s key business units, including Sergei Efanov, CEO of Vorkutaugol.

Alexey Mordashov, CEO of OAO Severstal, commented: “The improvement programs we have been implementing over recent years to enhance performance are delivering good results, giving us confidence for the future. We are committed to investing in Vorkutaugol, whilst remaining vigilant and flexible to the market environment. We will continue to closely monitor the company’s prospects and projects to ensure a bright future.”

This year, Vorkutaugol’s facilities will receive investment of approximately 6.9 bln. rubles. Key investment projects include the completion of the first stage of modernization at the Pechorskaya Central Coal Cleaning Plant, which will increase the annual mined rock processing capacity by 35% to 9.5 mln. tonnes before this year end (in 2012, Pechorskaya processed more than 7 mln. tonnes of mined rock), and further modernization of the company's coal cleaning facilities. Alexey Mordashov reviewed the second stage of modernization at Pechorskaya. Its completion is expected next year, which will increase the annual processing capacity of the Central Coal Cleaning Plant up to 11.5 mln. tonnes of mined rock.

This year, Vorkutaugol's major projects include the construction of an inclined shaft at the Zapolyarnaya mine linking to the Pechorskaya Central Coal Cleaning Plant. According to the project design, all coal produced by the mine will be transported via the inclined shaft to the coal cleaning plant, eliminating any intermediate stages such as raising up the product using skip shafts and railway handling. This will: deliver considerable cost savings in the delivery and transportation of mined rock to the cleaning plant; improve the facility's performance by increasing the master feed line's coal grassing capacity, and; in the longer term, will provide an opportunity to connect the fields of Zapolyarnaya and Vorkutinskaya mines with an integrated transport system.

The completion of the inclined shaft at Vorgashorskaya — another of Vorkutaugol's key projects — will enable the efficient exploration of the mine’s south-western section which holds Zh-rank, higher-value coking coal. Total investment in this project cost will exceed 1.5 bln. rubles. It is anticpated that the Vorgashorskaya mine will reach the coal seam as early as this year which will be soon followed by preparation of the longwalls for product extraction.

The other projects reviewed as part of Vorkutaugol's 2013 investment program include a project to modernize machinery and mining equipment, further improve health and safety and capital construction projects. The company plans to invest as much as 2.9 bln. rubles in the longwall equipment and machinery. In addition to the procurement of machinery, Vorkutaugol will continue to focus on health and safety projects in which the company will invest approximately 200 mln. rubles this year.