MOSCOW, Feb 25 (PRIME) -- U.K.-based metals and mining giant Evraz, which operates mainly in Russia, expects its capital expenditures to jump by around 50% on the year to U.S. $1 billion in 2021, CEO Alexander Frolov told reporters on Thursday.
Evraz also planned its expenditures at $1 billion in 2020, but had to revise the plans because of the COVID-19 pandemic in April–June – it delayed construction of a casting and rolling facility at Evraz ZSMK indefinitely, and slightly delayed upgrade of a rail mill at Evraz NTMK and construction of a wheel mill in the Sverdlovsk Region, he said.
“Now these two projects, I mean the rail mill and the wheel mill, are implemented with a slight delay as compared with our initial plan. If everything goes well, we will actively finance these two projects in 2021,” Frolov said.
“The largest development project that would have the most significant impact on our capex in 2021 is construction of a new rail mill in the U.S., in Pueblo. This project is also at an active stage now. We did not delay it, we think that it is a very important project for us, as we have to keep our market share in the U.S. These are the three major development projects. In total, we estimate the 2021 capex at around $1 billion.”
Evraz also wants to decide on the future of its coal assets, which were consolidated within the Raspadskaya company, until the end of 2021, he said.
The coal business includes seven mines, two open-pit mines, and three beneficiation plants in the Kemerovo Region and one mine in the republic of Tuva. In late January, Evraz said it may spin off the coal assets.
“When we made the announcement, we said that a spinoff is possible, and the board of directors ordered the management to consider this opportunity. We are working on this issue,” Frolov said.
“It is too early to speak about the way in which we would do the spinoff if the decision is made as there are different possibilities and many technical issues. We are working on these options. I think that the decision should definitely be made this year.”
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