USM Holdings invests in a number of Russia’s metals and mining companies. It owns Metalloinvest, the world’s #5 merchant iron ore producer.
Metalloinvest has the second largest measured iron ore reserve base in the world (c.14.6 billion tonnes).
The company is the fifth largest commercial iron ore producer globally and the number one in Russia and the CIS. It is #3 in pellet production, and the world’s leading merchant HBI supplier.
Metalloinvest’s main production assets are located in the European part of Russia and the Urals.
The company is organised into two integrated operating segments: mining and steel. The mining segment comprises Lebedinsky GOK and Mikhailovsky GOK, and the steel segment includes OEMK, Ural Steel and Ural Scrap Company. In addition to its mining and steel businesses, Metalloinvest owns a few auxiliary companies and other assets that provide services to the mining and steel segments.
Lebedinsky GOK is the leading Russian company focused on the extraction, benefication and treatment of iron ore. It has the largest iron ore reserves in the world. It is the sole producer of HBI in Russia and the CIS. Metalloinvest is in the process of constructing a third HBI plant with an annual production capacity of 1.8 million tonnes at Lebedinsky GOK. This plant will be the largest HBI module in the world.
Mikhailovsky GOK is the number two iron ore extraction and processing and pellet production operation in Russia, second only to Lebedinsky GOK. In 2014, Metalloinvest intends to finish construction of the largest pellet plant in Russia, with a capacity of five million tonnes a year at Mikhailovsky GOK.
The two GOKs’ production capacities allow Metalloinvest to take leading positions in Russia and the CIS, as well as a top-five spot in iron ore production globally.
OEMK is one of the most modern fully integrated steel mills in Russia, employing technology for the direct reduction of iron and electric arc furnace smelting, which enables the Company to extract metal practically free from harmful foreign substances and residual elements. The unique properties of OEMK’s steel and finished products have ensured a stable demand for them in the local market and worldwide. OEMK is located close to Lebedinsky GOK, which supplies it with high-grade iron ore concentrate through a 26-kilometre slurry pipeline. OEMK supplies its products to engineering, automotive, pipe, hardware and bearings industries in Russia and abroad.
Ural Steel is a fully integrated iron and steel works, including coke blast furnace, steelmaking and rolling production. The plant occupies leading positions in the niche markets of merchant pig iron, pipe billets and strips, as well as bridge construction steel and heavy plates.
Ural Scrap Company purchases, processes and delivers ferrous scrap to Metalloinvest’s steel segment assets.
Baikal Mining Company, a wholly-owned subsidiary of Metalloinvest, develops the Udokan copper deposit, which contains the major part of Russia’s total copper resources. It is one of the world’s largest undeveloped deposits of copper, with resources of c. 24.6 million tonnes according to JORC international standards.
Metalloinvest has a shareholding of approximately 5% in Norilsk Nickel, the world’s largest producer of nickel (18% market share) and palladium (41%), as well as a leading producer of platinum (11%) and copper (2%). Norilsk Nickel also makes a number of by-products, such as cobalt, rhodium, silver, gold, iridium, ruthenium, selenium, tellurium and sulphur.
With a 21% holding, Metalloinvest is the largest shareholder of the Canadian company Nautilus Minerals. Nautilus Minerals undertakes commercial seafloor exploration, searching for large sulphide deposits, which are a potential source of copper, gold, zinc and silver ore with high metal content. The company is developing the world’s first seafloor copper-gold project in the territorial waters of Papua New Guinea.