Investment Portal of the Arctic Zone of the Russian Federation

The iron solution

A resident of Russia's Arctic Zone launches an ore line at an in-pit crushing and conveying technology facility in Kostomuksha

04.12.22 // In early December, Karelsky Okatysh, a resident of the Arctic Zone of the Russian Federation and a subsidiary of Severstal, put into pilot operation an ore line at the in-pit crushing and conveying technology facility of the Tsentralny open-pit mine. With RUB 11 bn investment and a RUB 2 bn per year expected financial return, this is the largest project in the company's 40-year history. The project has created some 130 new jobs at the enterprise.

When the in-pit crushing and conveying technology is used, dump trucks unload the ore into a massive 30-metre-tall crusher weighing 2 mn kg. The crushed ore rises to a height of more than 200 m to the consolidation warehouse. However, it is hauled there not by dump trucks (as has happened so far) but by inclined ore belts spanning 2.5 km. At the warehouse, the ore is stacked and then sent to gondola cars to be transported to the crushing and beneficiation plant. Thus, the in-pit crushing and conveying facility will be fully automated, and the company will need much fewer dump trucks than it does now — their fleet will be gradually reduced by 2026. This will significantly reduce costs and cut carbon dioxide emissions from heavy machinery by 9,500 tonnes per year. The launch of conveyor ore transportation and commissioning of all equipment at the facility is scheduled for 2023.

Even at the start of this new and complex project, the company noted that it would fundamentally change the production process. Karelsky Okatysh specialists and their partners worked professionally and promptly from day one, with the project work carried out slightly ahead of schedule. However, a problem arose that demanded urgent action: in 2022, the project's primary supplier, a foreign company, left the Russian market.

"A team of specialists from Karelsky Okatysh and its contractors has taken on the work of the foreign supplier and managed to bring the project to launch," says Maxim Vorobyov, General Director of Karelsky Okatysh.

Karelsky Okatysh's Arctic Zone resident status, which the company received in 2021, has also helped it achieve its goals. The enterprise calls tax incentives the most crucial measure of support.

"The in-pit crushing and conveying project defines the future and present of our enterprise. It will reduce production costs and boost our competitiveness within the steelmaking production chain," says Maxim Vorobyov.

At the official ore line opening ceremony, Prime Minister of the Republic of Karelia Alexander Chepik also noted that the launch of the in-pit crushing and conveying facility would open up new economic prospects both for the enterprise and the region.

Once it reaches its full capacity, the in-pit crushing and conveying facility will process 70 mn tonnes of rock per year and become the tallest among similar production facilities in Russia.

"Projects that involve mining, mineral resource base development and the creation of mining clusters open up new possibilities to develop the industry in the interests of the Russian Arctic and the country as a whole. Investors create high-tech mining enterprises with state support. In a short time, Karelsky Okatysh has managed to preserve a strategically important deposit and increase the output of products needed by the metallurgical industry. The project has benefited both the AZRF resident, who has received tax benefits, the region, for which the enterprise is the primary taxpayer, and the people of Kostomuksha," said Vladimir Gudkov, Deputy Director of the Department for Arctic Zone Investment Projects Support at the Far East and Arctic Development Corporation.