Interview№ 2 September 2017

Can the Year of the Environment become a turning point, increasing the industrial sector’s interest in environmental protection?

I believe that we should think about the environment not just for one year but every year, to ensure sustainable business development. In this respect, I have mixed feelings about this initiative. I don’t think it is possible to alter mindsets and approaches to production in just one year. On the other hand, thanks to this campaign, people have started to think more carefully about the consequences of their actions.

In many companies, attention to the environment – environmental management – has already become an important part of the business culture.

Are there any examples?

As requested by the Russian Steel Association, we are currently working on a report that assesses the effectiveness of various schemes for regulating greenhouse gas emissions and how they can influence mining and steel companies in Russia.

A few years ago, based on the approved industry strategy, Russian Steel asked us to develop an industry-specific methodology for calculating greenhouse gas emissions and to forecast emissions in the mining and steel industries for 2020 and 2030, using various scenarios; we delivered on this. This time around, we are adding an economic assessment of emission control against the industry’s potential for reducing emissions.

Thus, the mining and steel industries demonstrate a constructive approach to the matter at hand, simultaneously answering two questions: ‘what can we do together to reduce emissions?’ and ‘how should the government regulate emissions to help us solve these issues effectively?’ In my opinion, this is the right approach.

Solving environmental issues obviously has some positive effects on society, but what about economic benefits?

In Russia, most of the heavy industry was established in the first half of the last century. For many years, the industry saw environmental protection and reducing its harmful impact on nature as ‘additional’ costs. Today, companies pay attention to the environment not only because the law and authorities demand it, but also because they see its obvious economic benefits.

Their focus has also changed. In the past, companies have tried to solve environmental problems ‘at the end of the pipe’, through the installation of various filters, construction of treatment plants, etc.; however, now they are looking at the production process itself, analysing which resources are used and how this can be improved. This is what brings tangible economic benefits to the companies.

The 100% utilisation of waste is considered the cornerstone of a circular economy, which suggests that the production and use of raw materials should not result in a growing volume of waste. What are your thoughts?

This is a beautiful concept, but in today’s conditions it is difficult for industrial companies to realise it fully. Mining and steel companies cannot simply stop using coke or blast furnace plants. The traditional steel industry, as you well know, was created in the twentieth century. It needs time to transform. However, the process has already begun and EAF steelmaking is developing at a fast rate.

Mining and steel companies continue to reduce their impact on the environment and human health, including by decreasing the discharge into rivers and closing the cycle of water turnover, which allows them to shut down drains to rivers. That said, it is hardly feasible to solve all the existing issues, especially the ones stemming from the twentieth century, in just one year, even in the Year of the Environment.

Are there any long-term solutions?

It seems to me that this requires productive partnerships, when both the government and companies get a clear understanding that it is impossible to continue as it has been and start working together towards finding a solution.

Currently, the use of hot briquetted iron (HBI) is one of the most promising trends in the development of the international mining and steel industry. More and more companies around the world are switching to electric arc furnaces (EAF) for steel smelting. While increasing the efficiency of steelmaking, it is also more demanding in terms of the quality of raw materials.

In its composition, HBI is similar to cast iron and is used as an additive to scrap in steelmaking, but, unlike scrap, it is virtually free from impurities. Thanks to HBI, it’s possible to smelt steel that is especially pure, which is necessary for the most demanding industries, such as the automotive sector, hardware and bearings.

HBI is the most environmentally friendly way to produce iron. It produces no emissions associated with the production of coke, sintering ore and pig iron, as well as solid waste. Compared with the production of cast iron, energy costs for HBI production are 35% lower, while greenhouse gas emissions are 60% lower.

Metalloinvest is currently the only producer of HBI in Russia and the CIS region. It launched its HBI-3 Plant with a capacity of up to 1.8 million tonnes of briquettes per year at Lebedinsky GOK. When the facility reaches maximum output, Metalloinvest’s total capacity for HBI production will reach at least 4.5 million tonnes per year.

How do you envisage the future for the mining and steel industry?

Over the past 15 years, the industry has changed a lot in terms of managing its processes and investments. An open market demands competitive production on an equal footing with international companies, as well as compliance with international technological standards.

The good news is that the industry has huge potential for rejuvenation and the introduction of innovative technological development to reduce energy use during production and increase resource efficiency. I think that in the coming years we will see significant changes in both the structure and technology of mining and steel product output. This will lead to the further environmental development of the industry, meeting any future demands. There is no other way.

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