Annual Report & Accounts 2012

Technology

Blast Furnace

A furnace is used for converting prepared iron ore into liquid iron (pig iron). It works on the counter flow principle: the charge, consisting of iron ore (including iron ore concentrate and pellets) and coke, is introduced from the top – usually via a rotary chute. The hot blast flows in the opposite direction. The blast is pre-heated in stoves and injected into the furnace through tuyeres. Coke is used as reduction agent. Depending on charge and method of operation, different types of pig iron can be produced. A blast furnace remains in operation for many years (furnace campaign). Blast furnace by-products are blast furnace gas and blast furnace slag.

Basic Oxygen Furnace (BOF)/Converter

In the basic oxygen furnace, molten iron is made into steel. Oxygen is injected to drive out carbon and other impurities dissolved in the melt. This process generates a lot of heat, so scrap is added to keep the melt at around 1700˚C. The resulting crude steel is then further purified, alloyed in subsequent secondary metallurgy processes, or brought directly to the casting process.

Ladle Furnace

The facility used to maintain and adjust the temperature of liquid steel during processing after tapping from the BOF (or EAF). This also allows the molten steel to be kept ready for use in the event of a delay later in the steelmaking process.

Vacuum Degasser

A process unit for vacuum degassing. Vacuum degassing involves exposing the liquid steel to vacuum to improve its properties by reducing the content of gases (hydrogen and oxygen) and the amount of non-metallic inclusions.

Continuous Casting

This is the process of continuously producing billets or slabs from liquid steel that is poured from a ladle into a tundish and a cast.

Electric Arc Furnace (EAF)

A method of producing steel through the melting of recycled steel and other sources of iron (pig iron, pellets, etc.) using electricity as a key energy source.

Hot-Rolling

The process of plastically deforming a hot slab into coil of specified thickness by passing it between rolls at a relatively high temperature.

Cold-Rolling

Changes in the structure and shape of steel achieved through rolling the steel at a low temperature (often room temperature). It is used to create a permanent increase in the hardness and strength of the steel. It is affected by the application of forces to the steel, which cause changes in the composition, enhancing certain properties. In order for these improvements to be sustained, the temperature must be below a certain range because the structural changes in the steel are eliminated at higher temperatures.

Continuous Rolling

In a Continuous Rolling Mill, rolling is performed simultaneously in several consecutive mill stands. The number of stands corresponds to the required amount of roll passes.

Reversing Mill

A Mill stand that forms material as it reciprocates between adjustable rolls. Consists of one or two stands, at least one of which carries out several reversing passes.

Pickling

Removing surface oxides from metals by a chemical reaction.

Hot Dip Galvanising

A process whereby steel is dipped into molten zinc or zinc alloy. The process can be performed continuously (by running steel strip through the molten metal) or in batches (by dipping complete products such as automobile bodies or gates into a metal bath).

Pre-painting Line

The method for applying organic coating involves the chemical treatment of the strip, followed by passing the strip through rolls to apply the paint and the subsequent thermal treatment of the strip to polymerise the paint. The goal is to apply the coating evenly in a short process, to obtain a uniform surface and the required coating thickness.

Z-mill (Sendzimir)

A cluster type cold-rolling Sendzimir mill operated by NLMK Pennsylvania.

Processing to finished coil is usually more complicated than low carbon product. It involves more than one cold reduction and heat treatment process (annealing) to reduce the coil to final thickness. The Low carbon process is usually Hot Roll – Pickle – Cold Reduce – Anneal – Temper, whereas the High carbon process is often Hot Roll – Pickle – Cold Reduce – Anneal – Cold Reduce – Anneal –Temper. The product is primarily high carbon steel (grades 1045 through 1095) and alloy steel (grades 4130 and 4140). The end use of these grades is heavily automotive-related for springs, clips, small motor parts and brackets. Some product also is used in appliances, aircraft brakes, golf clubs, blades, tools, saws and construction products.

Quenched & Tempered Steel

Quenching & Tempering Lines are used for the thermal treatment of thick plates.

Quenching is a heat treatment process involving heating steel to above the crystal structure transformation temperature, followed by rapid cooling. This improves the hardness of steel, but increases brittleness and makes it less ductile.

Tempering is used after quenching to reduce brittleness and improve ductility and involves reheating the steel and then allowing it to cool slowly. As a result, ductility is improved, brittleness is reduced and the required hardness is achieved. Such steels are used to manufacture low-wear mechanism components (i.e. excavator buckets, etc.).

Quarto Mill

A four-high mill with rolls positioned in one vertical plane, two of which are interior and smaller in diameter (work rolls), and two are exterior and bigger in diameter (back-up rolls).

Quard®

Quard® is the trademark of NLMK Clabecq for its abrasion-resistant steel plates (also called wear-resistant plates) produced through a quenching and tempering process. Quard® can be supplied in various hardness levels starting from 400HB.

Quend®

Quend® is the trade mark of NLMK Clabecq for its high yield strength steel plates that are produced through a quenching and tempering process. Quend® can be supplied in various yield strength levels starting from 700 N/mm2.

Raw materials and semi-finished products

Coke

The basic fuel consumed in blast furnaces in the smelting of iron. Coke is a processed form of coking coal concentrate.

Iron Ore Concentrate

Iron ore containing the valuable minerals of an ore from which most of the waste material has been removed by various treatment processes. Iron (Fe) content: 66.5%.

Pellets

An enriched form of iron ore shaped into small balls used in the steelmaking processes. Fe content: 65%.

Fluxes

Materials added to the charge to form slag and regulate its composition.

Limestone

Sedimentary rock composed largely of calcium carbonate in fine, medium and coarse fractions. Limestone is mainly used for sintering operations at the Lipetsk site, and sold to third parties for use in construction, including road building.

Dolomite

Magniferous sedimentary rock. This material is used mainly for steelmaking operations at the Lipetsk site, and sold to other steelmakers for use in sintering and steelmaking operations.

Scrap (Ferrous)

Ferrous (iron-containing) material that is generally remelted in electric arc furnaces. Steel mills also use scrap for up to 25% of their basic oxygen furnace charge. Scrap is waste steel, prepared for recycling.

Sinter

A product of sintering iron-bearing particles under high temperature into chunks to remove impurities and agglomerate small fractions of iron ores and concentrates.

Alloy

A material with metallic properties consisting of several chemical elements. Changing the composition and hence the microstructure of alloys enables the targeted engineering of desired material properties.

Crude Steel

Steel in its primary form of hot molten metal.

Slab

Rectangular block of steel, product of the casting process in the melt shop, used as a starting material in the rolling mills to produce hot strip.

Pig Iron

An alloy of iron and carbon that is produced in a blast furnace.

Billet

A semi-finished steel form that is used for long steel products such as bars, channels, wire rod or other structural shapes.

Finance and corporate responsibility

Corporate Responsibility (CR)

A form of corporate self-regulation integrated into a business model. Ideally, a CR policy would function as a built-in, self-regulating mechanism whereby a business would monitor and ensure its adherence to law, ethical standards, and international norms.

High Value Added Products (HVA)

Downstream product with the additional value of a commodity over the cost of the commodities used to produce it from the previous stage of production. For the purposes of this report, this definition applies to such products as thick plates, cold-rolled and further processed steels.

Global Depositary Receipts (GDR)

A bank certificate issued in more than one country for shares in a foreign. The shares are held by a foreign branch of an international bank. The shares are traded as domestic shares, but are also offered for sale globally through the various bank branches.

NLMK’s GDR programme was launched in December 2005. GDR’s are traded at the LSE, with 1 GRD = 10 ordinary shares.

Vertical Integration

When a business controls all stages of production, from raw materials to final delivery. The advantages of vertical integration include the ability to secure supplies and future orders.