October 22, 2019

Cherepovets Steel Mill, one of the largest steel plants in the world (part
of the Russian Steel division of PAO Severstal), reduced its overall
consumption of almost all energy sources per product ton in the first nine
months of 2019, compared to the same period of 2018. This resulted in a total
cost saving of 156 million rubles.

This was achieved by reducing electricity, fuel and oxygen consumption.
Total electricity consumption fell by 17.6 million kWh, fuel by 12.5 thousand
tons, and oxygen by 19.7 million m3. Severstal Russian Steel’s energy
consumption intensity for 9M 2019 was 5.762 Gcal per ton of liquid steel.

As at 9M 2019, total electricity generated in-house amounted to 3212.2
million kWh, making the mill 72.7% self-sufficient in electricity. During the
first half of this year, Cherepovets Steel Mill carried out reconstruction
works at Turbogenerator No. 5 at TPP-SS (Thermal Power Plant & Steam
Blowing Station). The updated unit is now fully operational and has already
achieved record daily electricity generation levels – 13,838.9 thousand

Vadim Germanov, CEO of Severstal Russian Steel, commented: “We have
successfully reduced the unit costs of our energy resources through
implementing investment measures and exercising operational control over our
energy consumption. In particular, I would like to highlight that the processes
of coke-agglomeration, steelmaking and rolling production all demonstrated high
levels of energy efficiency. Within Severstal’s strategic priority to achieve
“Cost Leadership”, we plan to increase the share of electricity generated
in-house to 95% of total consumption by 2025. We will generate new energy
through utilizing secondary energy sources – coke, blast furnace and converter