EVRAZ

EVRAZ Group is the largest producer of steel and steel products in Russia, with 16.3 million tonnes of crude steel produced in 2010. The company’s production volumes make it one of the 20 largest steel producers in the world. The Company is ranked the 20th largest steel producer in the world based on crude steel production of 16.3 million tonnes in 2010.

EVRAZ Group was founded in 1992 as a small metal trading company, Evrazmetall. During the first few years, the company’s turnover and field of activity steadily expanded. During the mid-1990s, Evrazmetall became involved in settling debts between Russian mining and metallurgy plants. The firm accumulated promissory notes of several steel plants, coal mines and concentrating factories. This led to a decision to acquire equity stakes in mining concerns. In 1995, EAM Group CJSC was founded, uniting several coal, ore and steel companies.

In late 1995, EAM Group signed a strategic partnership agreement with Duferco, becoming owner of a controlling stake in Nizhny Tagil Steel Mill (NTMK), which was going through a crisis at that moment. The situation at Nizhny Tagil gradually stabilised and a process of reconstruction and modernisation was put in motion. In 1999, EAM Group starts to manage two other large steel plants, West Siberian (ZSMK) and Novokuznetsk (NKMK), while holding a significant part of those companies’ debts.

Global reinforcement of market competitiveness called for new approaches to corporate organisation. In late 1999, EvrazHolding was founded as the chief executive organ of NTMK, ZSMK and NKMK, as well as the Vysokogorsky and Kachkanarsky Ore Mining and Processing Plants, Evrazruda and Nakhodka Sea Port.

On June 2, 2005, The Company listed global depositary receipts (GDRs), representing approximately 8.3% of its issued share capital, on the Official List of the London Stock Exchange.

The Company expanded further its mining platform having acquired in 2004-2005 Mine 12, a 50% stake of Yuzhkuzbassugol, an interest in Raspadskaya coal company, which increased EVRAZ's self-sufficiency in key raw materials. The acquisitions of rolling mill Palini & Bertoli (August 2005) in Italy and of Vitkovice Steel a.s. (November 2005), the largest platemaker in the Czech Republic, further diversified the Company’s product mix into value added areas as well as providing access to customers within the European Union.

In 2006, EVRAZ acquired a 73% stake in Strategic Minerals Corporation, USA, one of the world’s leading producers of vanadium alloys and chemicals for the steel, chemical, and titanium industries, and a 24.9% stake in Highveld Steel and Vanadium Corporation, South Africa, increasing it to 54.1% in May 2007.

In 2007-2008, EVRAZ acquired Oregon Steel Mills and Claymont Steel. In June 2008, the Company completed the acquisition of IPSCO‘s plate and tubular business in Canada. Due to these acquisitions EVRAZ has secured an important place in the attractive plate and tubular markets in North America and became the leading rail producer globally.

In December 2007, EVRAZ acquired a number of Ukrainian assets – Dnepropetrovsk Iron and Steel Works, Sukha Balka Iron Ore Mining and Processing Complex, Dneprodzerzhinsk Coke Chemical Plant, Dneprokoks and Bagleykoks. As a result of this strategic decision the Company expanded into the CIS market and increased the level of self-coverage in iron ore.

In October 2009, EVRAZ acquired Carbofer Metall one the largest Russian steel distribution networks, The acquisition was in line with EVRAZ’s plans to increase direct sales of its steel products to end customers in Russia.

Acquisition of Vanady-Tula in November 2009 allowed EVRAZ to increase processing capacity of vanadium-containing raw materials and strengthen its position in the vanadium market in Russia and globally.

The Mezhegey coal deposit in the Republic of Tyva (Russia), for development of which EVRAZ won the tender in March 2010, is a strategic investment aimed at covering the needs of EVRAZ’s steelmaking facilities for high quality hard coking coal after the depletion of existing Zh-grade coal reserves as well as benefit from production and sales of additional volumes to the market.

In October 2010, EVRAZ won the tender to develop the Eastern field of the Western part of the Ulug-Khemsky coking coal deposit in the central part of the Republic of Tyva, East Siberia. The acquisition of the licence for the Eastern Field was in line with EVRAZ’s strategy of enhancing vertical integration into raw materials, specifically coking coal. This field is adjacent to the Mezhegey coal deposit, for which EVRAZ won the licence in March 2010, and there are significant synergies based on sharing the infrastructure needed to develop these two projects.

In December 2010, EVRAZ acquired OAO INPROM, a leading metal service company in Russia. As a result, a joint venture, EVRAZ Metall Inprom, consisting of the assets of EvrazMetall and INPROM, was created. As a result of the deal, EVRAZ expanded its presence in the steel retail trade in Russia, and in particular in the European part and the dynamically developing southern region. It is also expected that it will see an increase in profitability from high margin steel product sales.

Pursuant to a share exchange offer in November 2011 with Evraz Group SA, whereby existing shareholders in EVRAZ Group SA received shares in EVRAZ plc, a public company limited by shares incorporated in the United Kingdom, in return for their shares and/or GDRs in Evraz Group SA, EVRAZ plc became the new ultimate holding company of the EVRAZ Group. Under the share exchange offer, EVRAZ Group SA shareholders who accepted the offer received 9 new shares in EVRAZ plc for each EVRAZ Group SA share they held and 3 new shares in EVRAZ plc for each EVRAZ Group SA GDR they held.