Ural Mining and Metallurgical Company

Ural Mining and Metallurgical Company (UMMC or UGMK Russian: Открытое акционерное общество «Уральская горно-металлургическая компания») is a Russian metallurgical company based in Verkhnyaya Pyshma. It is the second largest copper producer in Russia.

OJSC Ural Mining and Metallurgical Company
TypePublic (OAO)
IndustryMetals, Mining
Founded1999 (1999)
Headquarters
Verkhnyaya Pyshma
,
Russia
Key people
Andrei Kozitsyn, CEO
ProductsNickel
Copper
Coal
Lead
RevenueUS$5.1 billion (2010)
23,200,000,000 Russian ruble (2015) 
Websitewww.ugmk.com

The holding company was formed around joint-stock company Uralelektromed in 1999. The main owner of the company is Uzbek billionaire Iskander Makhmudov. The president of the company is Andrew Kozitsin (Russian: Козицын, Андрей Анатольевич).

The company owns about 50 companies located throughout Russia.[1]

Community relations
UMMC in Yekaterinburg, Russia.

UMMC has helped the city of Yekaterinburg. For example, at the end of 2013, UMMC worked on a deal to help secure the city's debt liabilities with the bank Gazprombank.[2]

UMMC, along with other companies, will contribute a total of 2 billion rubles (equivalent to around U.S. $67 million) to charitable social programs. Other companies giving funds along with UMMC include JSFC Sistema, Sibur, RusHydro, and Inter RAO UES.[3]

Education

Russia's Office of Early Childhood Education tasked UMMC Telecom in 2013 with connecting all kindergartens to the internet. Specifically, UMMC Telecom will connect kindergartens in Pyshma, an area near Yekaterinburg.[4]

In September 2013, UMMC donated $250,000 to kindergartens in the Krasnouralsk area. The donations were intended to help buy food and maintenance.[5]

Healthcare

For example, UMMC created the “Children of Russia” project. UMMC launched a pilot for the program in the Sverdlovsk oblast. The program serves kids who have serious and numerous health disorders.[6]

Job training

UMMC partnered with the Moscow State Institute of International Relations in 2013 to educate and train people in international transportation, in the hope that the training will satisfy UMMC's employment needs while offering new jobs to local people. UMMC runs a college and training institution known as the Technical University of UMMC. The facility is located next to the company's headquarters.[7]

Orphans

In support of vulnerable populations such as children (and in addition to health services described above), UMMC sponsors special programs for youth that include sports tournaments, development of gifted children initiatives, funding for orphanages in the Urals and Siberia, and the “Heart to Heart” program which collects clothing, books and funds for children in orphanages and residential treatment centers. The company created social rehabilitation programs for orphans and children without parents. UMMC has given money to orphanages, given classroom courses to orphans and provided medical treatment to orphans.[6]

Veterans

UMMC also supports veterans; specifically, supplementing limited government assistance for retirees. Owner Iskander Makhmudov has led programs for material assistance for housing and health care expenses, travel expenses to health facilities, and special pensions for war veterans. For non-veteran retirees, UMMC provides private pension funds to retired employees and supplemental pensions for employees who were especially valuable to the company during their careers.[8]

In 2013, the Red Apple Moscow International Advertising Festival recognized UMMC for the company's work in children's health. UMMC runs a children's clinic, which is one component of the company's children's health program. UMMC created a video that promoted the clinic, and the video was awarded the "bronze medal" at the festival.[9]

The company donated equipment to help people affected by flooding in the Far East region of Russia in 2013. The total donation exceeded $900,000.[10]

The company sponsors the championship UMMC Yekaterinburg women's basketball team.

Women's basketball

UMMC is the sponsor of Russian women's basketball team UMMC Ekaterinburg. The team won the European title in 2003. According to Croatian news source HT Croatian Telecom, this year the team is the “strongest women’s team in the history of European basketball.” [11]

Company

Financials

Net profit of the company for 2011 was 8.9 billion rubles, which was up from 3.2 billion rubles in 2010.[1]

According to Russia & CIS Business & Financial Daily, the company might budget approximately 60 billion rubles in 2013 for investments. The company's general director, Andrei Kozitsyn, said, "We're signing contracts for next year, and have started budgeting. The average copper prices will be around $8,000 a tonne in 2012. We're hoping it stays at that level next year. We're also planning the same investment program as this year - 60 billion rubles." [12]

UMMC plans to increase coal output to 50,600,000 tons by the year 2016. The company also plans to invest 63 billion rubles in raw materials.[13]

In September 2012, copper smelting company OJSC Uralelectromed, an enterprise owned by UMMC, approved $2.05 billion worth of guarantees for loans for UMMC Holdings, which manages UMMC's assets.[14]

People

Andrei Kozitsin is the CEO of UMMC. Kozitsin sits on the board at Ural Federal University. He is the recipient of the Big Golden Order of Merit of the Austrian Republic, the highest award given by the Austrian government, according to Yekaterinburg News.[15]

Products

UMMC produces approximately 40% of Russia's output for cathode copper and zinc.[1]

UMMC mines a significant portion of Russia's zinc output.

Additionally, it produces approximately:[1]

  • 50% of Russia's output for lead
  • 25% of non-ferrous rolled products (domestic market)
  • Over 50% copper powder (European market)

Facilities
  • Bashkir Med: Bashkir Med is a subsidiary of UMMC. UMMC created Baskhir Med in 2006. According to news reports, it appears that UMMC uses Bashkir med to hold licenses for its mining operations.[16]
  • Bashkortostan Mine: UMMC will invest over $300 million into the construction of a zinc and copper mine. The mine is located in Bashkortostan, Russia. Bashkir med owns the license for the mine.[16]
  • Gaisky GOK Plant: UMMC will invest over $400 million into its Gaisky GOK plant. The investment will go toward reconstruction and development. Gaisky GOK is an ore mining and processing plant.[16]
  • Krasnobrodskaya-Koksovaya: In 2011, RusBusinessNews reported that UMMC had commissioned a new coal processing factory. The factory is known as Krasnobrodskaya-Koksovaya. UMMC invested 3.3 billion rubles into the project. According to the article, the factory will process 3 million tons of coal each year.[17]
    The company implemented quality improvement procedures at its facility in Kurgan, Russia.
  • Lufia: In 2013, UMMC's Lufia Auto Aggregate Plant won a regional contest related to "high social efficiency", meaning that the company developed social partnerships and developed human potential.[18]
  • Mednogorsky Copper and Sulfur Plant: The plant, owned by UMMC, competed against Norilsk Nickel and won exploration and mining rights in 2012. The rights extend to the Yelanskoye and Yelkinskoye mineralizations in Voronezh Region.[19]
  • SHAAZ: UMMC implemented a new "quality policy" at the SHAAZ facility, which is located in the Kurgan region. The policy meets ISO/TS-16949 standards.[20]
  • Tyumen Steel Mill: In July 2012, Metal Mining Wire reported that UMMC had planned to build and run a new steel mill in the Tyumen region of Russia. The mill would cost $675 million. According to the article, UMMC expects the new mill to produce 540,000 metric tons of steel per year.[21]

Environment

In 2013, UMMC reported that it had invested 254 million rubles in environmental protection activities in the previous year. Specific areas of investment included sewage treatment, gas facilities, and air pollution.[22]

Widely using administrative resource, UMMC is working for mining nickel ores in Voronezh Oblast, the Khopyor River region, near the famous Khopyor Nature Reserve, populated with protected beavers, wisents and Russian desman.[23]

It does not taken into account nor the numerous mass protests residents of the surrounding communities that are dispersed by the police, nor the numerous concerns of scientists and environmentalists that these works simply destroy the ecological system of the river Khopyor. A number of biologists drew attention to the fact that if the work on the extraction of nickel is starting, the ecological situation in the endemic area of residence may deteriorate so much that disappeared last desmans. Thus, in addition to mining nickel ores fields, UMMC is planning to build a processing plant next door to Khopyor Nature Reserve.[24][25]

According to participants of the protests against the start of mining nickel ores by Ural Mining and Metallurgical Company, the authorities are using intimidation against them, fines and the creation of an information vacuum.[23]

May 11, 2013 environmentalists organized a protest camp near geologist, but on May 13 the protesters were beaten up by the private security company "Patrol".[26] The leader of the local cultural community, Igor Zhitenev, received a severe concussion. In addition to this, his jaw and ribs were broken.[27]

May 23, 2013 demonstration in defense of the Khopyor River in Voronezh, timed to coincide with President Vladimir Putin's visit to the region was broken up by police.[28]

Target for environmental protest extortion

In December 2013, Russian police detained two people for alleged extortion against UMMC. The two people, according to The Moscow Times, were formerly linked to an environmental protest movement. The men were accused of trying to extort money from UMMC in exchange for ending environmental protests against the company.[29]

Subsidiaries

UMMC owns 24 companies that do mining and processing. UMMC has 138 licenses to mine and explore subsurface mineral resources.[16]

Subsidiaries of UMMC include Uralelektromed, Mednogorsk Copper-Sulphur Combine, Svyatogor, the Sredneuralsk Copper Smelter, Gaisky and Uchalinsky GOKs.[30]

Aircraft

According to SKRIN Market & Corporate News, the company plans to develop a new regional jet by 2015. The aircraft will be manufactured in a Czech Republic-based plant. All tests are planned to be completed in 2013.[31]

Chelyabinsk Zinc Plant

UMMC, CJSC Russkaya Mednaya Kompaniya (RMK), and other investors own Chelyabinsk Zinc Plant (CZP). CZP is the biggest Russian producer of high-grade zinc and zinc alloys.[32]

Kuzbassrazrezugol

In February 2013, Interfax reported that Ural Mining and Metallurgical Company (UMMC) has made a buyback offer to the minority shareholders in UK Kuzbassrazrezugol' OAO (Kuzbassrazrezugol Coal Company), which is controlled by LLC UMMC Holding. UMMC became the owner of 51.018% of Kuzbassrazrezugol Coal Company's ordinary shares on December 29, 2012. According to Kuzbassrazrezugol Coal Company's list of affiliated entities as of last August 14, UMMC previously owned 25.633% of its charter capital.[33]

Uralelectromed

Uralelectromed provides heat to all departments and divisions of the industrial site, and to part of the sporting and social facilities in Verkhnyaya Pyshma, and it also supplies heat to certain residential areas.[34]

In August 2013, the company announced that it has begun production of a new copper electrolysis product at Uralelectromed.[35] The company also begun a sinking process at its Jubilee field in Bashkortostan, part of a 3.5-year program to install utilities and power stations at the future site of Jubilee's administrative complex. When complete, Jubilee is expected to yield 2,625 tons of copper per year. In total, the UMMC plans to invest more than $42 million in Jubilee.[36]

References
  1. "M&A: FAS Refused to Satisfy Ural Mining and Metallurgical Company’s Application for Acquisition of Revda Non-Ferrous Metals Processing Works" AK&M Online News (English), 8 Oct 2012
  2. "UMMC to hold EGM," SKRIN Market & Corporate News. 10 December 2013. Retrieved 19 December 2013 through Nexis.
  3. "Russia: Republic of Bashkortostan to get RUB 2bn for social programs in 2013", Kommersant - Volga, 13 Feb 2013, accessed 13 Mar 2013 via Nexis
  4. Douglas Waits, "UMMC Telecom connecting local pre-schools to the internet", CISTran Finance. 14 November 2013. Retrieved 18 December 2013.
  5. Martin Fletcher, "UMMC donates $250,000 to kindergartens in Krasnouralsk", Yekaterinburg News. 13 September 2013. Retrieved 18 December 2013.
  6. Louis Hamilton, "UMMC, Makhmudov leading effort to help Russian orphans", Yekaterinburg News. 4 December 2013. Retrieved 18 December 2013.
  7. Douglas Waits, "MGIMO opening new department with UMMC", CISTran Finance. 16 October 2013. Retrieved 18 December 2013.
  8. "About Iskander Makhmudov", Iskander Makhmudov, accessed 18 Mar 2013
  9. Dukes, Fred (7 October 2013). "UMMC receives bronze for children's health initiative". Metal Mining Wire. Retrieved 7 October 2013.
  10. Moran, Mike (27 September 2013). "UMMC donates equipment to eastern flood victims". Metal Mining Wire. Retrieved 7 October 2013.
  11. "Lupica Welcome the Best Basketball Team in History" (translated from Croatian: “Lupice dočekuju najjaču košarkašku ekipu u povijesti”), HT Croatian Telecom (tportal.hr), 17 Dec 2012
  12. "Metals Holding UMMC to Invest 60 Bln Rubles in 2013", Russia & CIS Business & Financial Daily, 18 Oct 2012
  13. "Russia: UMMC to invest some RUB 63bn in raw materials base development", Vedomosti, 14 Feb 2013, accessed 13 Mar 2013 via Nexis
  14. "Uralelectromed Guarantees $2.05 Bln in Gazprombank Loans for UMMC ", Russia & CIS Business & Financial News Daily, 4 Oct 2012
  15. Blissett, Chelly. "UMMC CEO, UrFU board member Andrei Kozitsin receives Austria’s highest award". Yekaterinburg News. 2/10/2014. Retrieved 2/10/2014.
  16. Benjamin Close, “UMMC plans $406.8 million investment in Gaisky GOK”, Metal Mining Wire, 21 Aug 2012
  17. "Ural Mining and Metallurgical Company completed the construction of the processing factory in the Kemerovo Region", RusBusinessNews, 30 Aug 2011
  18. Lisa Barron, "UMMC plant wins regional social efficiency contest", CISTran Finance. 26 November 2013. Retrieved 18 December 2013.
  19. "UMMC resumes exploration in Voronezh Region after protests", Russia & CIS Business & Financial Daily. 29 November 2013. Retrieved 19 December 2013 through Nexis.
  20. Douglas Waits, "UMMC plant unveils new quality policy", CISTran Finance. 11 October 2013. Retrieved 18 December 2013.
  21. Andrew Lair, "Ural Mining and Metallurgical Company to open new steel mill" Archived 2013-02-16 at Archive.today, Metal Mining Wire, 6 Jul 2012
  22. “In 2012 JSC “Uralelektromed” invested 254 million rubles in an enforcement of environmental protection measures”, Ural Mining and Metallurgical Company press release, 26 Feb 2013, Accessed 19 Apr 2013
  23. Мария Епифанова. "Люди, выхухоль и выгода". // novayagazeta.ru. Archived from the original on 2012-10-17. Retrieved 2012-10-13.
  24. Под медное крыло
  25. Битва Хопра со злом
  26. В Воронежской области избиты защищающие Хопер экоактивисты
  27. Экологи дерутся за Хопер
  28. В Воронеже разогнали встречавших Путина экоактивистов
  29. "Environmental Protesters Arrested on Extortion Charges", The Moscow Times. 2 December 2013. Retrieved 18 December 2013.
  30. "Copper Mining in Russian Federation - Overview", MBendi Information Services website
  31. "UMMC Plans to Develop a New Regional Jet by 2015", SKRIN Market & Corporate News, 5 Oct 2012
  32. "Chelyabinsk Zinc Plant Board of Directors Approves 8 Candidates to New Board", Russia & CIS Business and Financial Newswire, 6 Mar 2013
  33. "Ural Mining and Metallurgical Company Makes Buyback Offer To UK Kuzbassrazrezugol' OAO's Minority Shareholders-Interfax". Reuters. February 5, 2013. Retrieved 20 June 2013.
  34. Hamilton, Louis (June 27, 2013). "UMMC's Uralelectromed gears up for heating season". Yekaterinburg News. Retrieved 8 July 2013.
  35. Lair, Andrew (August 23, 2013). "UMMC tests copper electrolysis product at Uralelectromed". Metal Mining Wire. Retrieved August 24, 2013.
  36. Close, Benjamin (August 23, 2013). "UMMC begins sinking process at Jubilee field". Metal Mining Wire. Retrieved August 24, 2013.
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