The Russian Industrial and Metallurgical Holding (PMH) has announced a complete transition to using its own iron ore concentrate for pig iron production, effectively eliminating the purchase of ore on the side.
According to the company, this step allows them to reduce procurement costs, reduce dependence on market volatility and reduce the cost of cast iron produced.
Achieving full self-sufficiency, significant cost savings are expected
IMH stated that by increasing ore production and concentrating capacity at its own mines, it has achieved full self-sufficiency in iron ore raw materials. The financial savings from the transition are estimated at more than 17 billion rubles in 2025 alone.
This step ensures that cast iron producer Tulachermet (part of PMH) will receive iron ore exclusively from the holding's own mining assets.
Strategic rationale: stability, cost control and vertical integration
PMH formulated this decision as a strategic shift towards vertical integration and industrial development. stability. Using your own ore gives:
- independence from external raw material markets and price fluctuations,
- reduction of production costs and increase in profitability,
- supply of pig iron,
- improvement of control over the quality of raw materials and continuity of production.
Industry-wide significance
At a time of instability in global commodity markets – with rising ore prices and supply chain challenges – the IMH transition highlights how integrated mining and metallurgical holdings can gain an advantage through full internal supply.
It may also influence other producers, especially in regions where ore and pig iron supply chains are fragmented, to consider similar vertical integration strategies to ensure long-term stability and cost competitiveness.
