Metinvest unites mining and beneficiation plants into one management system

Metinvest Group has implemented a new model for the operation of its mining enterprises in Kryvyi Rih. Starting in April, Central, Ingulets and Northern Minings (GOKs) will be managed by a single administrative and management center.

According to the company’s press service, a mining department has already been set up within the Group’s Operations Directorate. The head of the department is Igor Tonev, who has also been appointed as the sole CEO of the three GOKs. From now on, the plants will have a single administrative team and functional managers.

Projected impact of the new management model on the GOKs:

• ore beneficiation and iron ore concentrate production processes will be integrated into a common process chain for all the plants;
• the efficiency of managing the GOKs’ reserves and stocks will increase;
• excess capacity and equipment will be distributed among the company’s production sites in Kryvyi Rih.

In addition, the creation of a single control center will help optimize the same business processes across the enterprises and centralize some service functions. This will significantly reduce administrative costs, which, in turn, will increase the economic sustainability of the GOKs.

«Given the current challenges, with no objective way to bring the workload of the GOKs to the optimal level, we are looking for the effect of combining their capabilities and business processes. To this end, the company sees its mining and processing plants not as separate facilities with separate teams, but as one large production site and one large team, and tries to leverage the advantages of each GOK in a single technological chain. The creation of a single administrative and management center for managing the operations of the plants, so to speak, a consolidated GOK, will significantly simplify, speed up and increase the efficiency of these processes, as well as help create new synergies between the enterprises,» said Yuriy Ryzhenkov, CEO of Metinvest.

It is planned that the unified management center will have one functional director and one department for each area of work for all GOKs: for example, production, finance, procurement, etc. At the same time, each GOK will retain its legal status. The centralization of management functions at the GOKs will affect only administrative staff and will not affect workers in any way.

«The merger of mining and processing plants into a single management structure will increase their operational flexibility and resilience. This will help to more effectively address the challenges associated with ore production and exports, as well as possible emergencies that arise from time to time due to the hostilities,» commented GMK Center analyst Andriy Glushchenko on Metinvest’s decision.

Igor Tonev, who has been with Metinvest Group since 2011, commented on his appointment. Prior to his appointment, he was the head of Metinvest-SMC (trading company) since 2019.

«The main task facing the team of the mining and processing segment today is to steadily improve operational efficiency while meeting production targets and ensuring proper product quality. This will enable us to operate with a positive financial result in the face of limited production capacity. And the new model of the GOKs’ operation opens up great opportunities for this. Previously, each GOK operated as a separate enterprise, but now we are truly united into one big team. This also allows us to effectively redistribute staff between the GOKs to quickly close deficits and replace third-party services, share best practices and implement them quickly,» commented Igor Tonev.

All transition processes at the enterprises are expected to be completed within a few months.

As GMK Center reported, at the end of March, Central Mining and Processing Plant (Central GOK) completed a major overhaul of the OK-324 roasting machine at the pelletizing plant.