Water resources
Since the year 2000, water consumption to supply the production needs of NLMK Group has halved, while the output has doubled.
The share of recycled water supply within NLMK Group is at a consistently high level of 97%, which saves more than 3 billion cubic meters of freshwater annually.
Over the last 40 years, the intake of fresh water from the Voronezh River by the Group’s main site in Lipetsk has been reduced ninefold.
Water intake from external sources by NLMK sities is insignificant, accounting for less than 4% of the total water consumption of the Group. Maintaining the same low level of fresh water intake as production volumes are growing is an important objective for NLMK Group. The Group uses water from surface water bodies and underground sources, as well as rainwater runoff for industrial water supply.
Fresh water usage for production needs by NLMK Group
The Group companies do not withdraw water from wetlands included in the Ramsar List of Wetlands of International Importance or from water bodies located within environmental conservation sites.
The water bodies that supply NLMK companies are not classified as particularly vulnerable based either on their size, role, or status as being rare, threatened, or endangered.
The regions of the Group's presence are characterized by high availability of water resources; the Group does not operate in water-scarce regions. According to the UN methodology, a region or country is considered water-scarce if its annual water supply is below 1,700 cubic metres per capita.
The Group’s companies withdraw water in accordance with valid permits and make no significant impact on the water sources in question. NLMK’s assets located in Russia account for 85% of the Group fresh water intake (supply).
The company conducts regular monitoring and assessment of water risks in all regions of its presence, using data from regular reports on the state and utilization of water resources published by the Ministry of Natural Resources and Ecology of Russia and by the competent oversight bodies in other countries, as well as:
- https://wri.org/;
- https://sage-ill-nappe-rhin.alsace/;
- https://watersgeo.epa.gov/watershedreport/.
Water availability risks are a focus of attention for NLMK Group.
It was found that in the short and medium term this risk has a low probability of affecting the Group’s activities. Water scarcity risk
Long-term forecasts predict that water shortage may affect NLMK’s sites in Zarinsk, Farrell PA, Clabecq, Lipetsk and Stary Oskol. In areas currently under low water stress, e.g. Zarinsk, this is unlikely to have a significant impact on operations. However, at sites already located in areas of high or extremely high water stress, e.g. Stary Oskol and Clabecq, this could have an impact on operating costs, where water prices are expected to rise amid shortages. The likelihood of increasing water costs is highest in Pennsylvania. In total, water availability risks were found to account for less than 1% of the overall estimated value at stake in terms of climate. In 2023, the company and the stakeholders did not experience any collisions of interests related to water scarcity risks.
Flood risk
There has been no flood risks on record in Lipetsk for a long time. The latest flood event was reported in the region in June 2016, but no disruption to operations at NLMK Lipetsk was observed due to mitigation measures in place at the site (industrial storm drains and shop floor water pumps).
Drought risk
The risk of drought has also been analysed for the Lipetsk Region. The study has shown that, while Lipetsk has experienced this natural phenomenon before, it did not have a significant impact on the operations of NLMK Lipetsk. The assessment of NLMK Lipetsk operations during historical droughts confirms that the site’s vulnerability to droughts is low. Only one area, namely the Belgorod Region where Stoilensky is situated, is potentially exposed to local water shortage. Recognizing the importance of preserving water resources in light of shortage risks, Stoilensky is implementing projects to cut down potable water consumption and taking action to protect water resources from the harmful effects of operations, including through better safety and reliability of its hydraulic structures. The site’s certified laboratory regularly samples and checks the quality of water withdrawn, of its sewerage, and of water bodies in the area of potential impact. In 2021, a project was approved to redirect pumped-up clean drainage water from Stoilensky’s open pit directly into a water body without using it in a closed-loop system. This will return a valuable resource of up to 8 million cubic meters of water per year to the natural environment.
In 2023 and throughout its history, the Group has not experienced any incidents related to water supply disruptions (interruption of operations or plant closures, etc.) that would have affected the financial standing or production activities of its companies.
Each NLMK site makes use of water purification and treatment technologies that ensure the safety of effluents as well as the quality of water used for production and household purposes in accordance with the standards set by applicable regulations. There are no untreated discharges.
The Company’s Environmental Programme under Strategy 2023 set the goal of reducing the discharge of wastewater pollutants into water bodies by 25% compared to 2018. In 2022, compared to 2018, the pollutants discharge was reduced by 50%. This result was already significantly above the original target. Going forward, NLMK Group seeks to bring industrial effluent discharge by its Russian companies to zero.
Monitoring of effluent discharge into water bodies at all sites is an important environmental aspect of NLMK Group operations.
Pollutants discharge into water bodies across NLMK Group, kT
Key projects aimed at reducing the impact on water resources
In 2020, NLMK Lipetsk completed a project to upgrade its municipal wastewater treatment facilities with an investment of RUB 118 million. In 2022, pollutant discharge rate was reduced by 56% compared to 2016 through an upgrade of local treatment facilities at NLMK Lipetsk, which was completed in 2020, and due to a set of measures to reduce effluents by 40%.
Reduction of NLMK’s specific industrial and storm effluents into water bodies, kg/t steel
In 2020, NLMK Lipetsk completed a project to upgrade its municipal wastewater treatment facilities with an investment of RUB 118 million. In 2022, pollutant discharge rate was reduced by 56% compared to 2016 through an upgrade of local treatment facilities at NLMK Lipetsk, which was completed in 2020, and due to a set of measures to reduce effluents by 40%.
Reduction of NLMK’s specific industrial and storm effluents into water bodies, kg/t steel
Monitoring of effluent discharge into water bodies at all sites is an important environmental aspect of NLMK Group operations. NLMK Group's summary statistics on the volume of water discharge and the pollutants content in it are formed based on official statistical reports for Russian companies and reporting data of the Group’s international companies. The bulk of pollution comes as suspended solids, dry residues and biological oxygen consumption. The Group companies handle wastewater in accordance with quality and quantity indicators established by discharge permits. These permits are issued by competent authorities to set wastewater quality standards based on the profile of water bodies and the so-called fisheries standards (standards applied to water bodies intended for fish breeding). These standards are much stricter in Russia that similar requirements for industrial wastewater in other countries as well as the international potable water standards. The number of controlled indicators applied to the Group’s main production sites is approaching twenty. Some of them require enterprises to discharge water that is cleaner than the water they take in. NLMK Group companies perform regular laboratory tests for all controlled indicators to ensure compliance with the effective standards and requirements.
