Alexey Mordashov: From Mill Worker’s Son to Steel Magnate

Alexey Mordashov, one of Russia’s most prominent business figures, epitomizes the journey of rising from humble beginnings to commanding one of the world’s largest steel empires. As the majority shareholder in Severstal, a Russian steel and mining company, Mordashov has played a pivotal role in shaping the country’s industrial landscape. His story is one of ambition, strategy, and resilience, particularly in the face of geopolitical challenges and economic sanctions.

Born into a family of mill workers in Cherepovets, Russia, in 1965, Mordashov’s early life was rooted in the industrial environment that would later define his career. He excelled academically and graduated from the Leningrad Engineering-Economical Institute with a focus on economics. Upon completing his studies, he joined the Cherepovets Steel Mill, which would eventually evolve into Severstal.

Mordashov’s rise within the company was swift. Recognized for his financial acumen, he was appointed finance director at a young age. This role placed him in a position of immense responsibility during a critical period in Russia’s transition to a market economy. When the mill’s elderly director encouraged Mordashov to acquire shares to protect the company from external control, he seized the opportunity. However, instead of simply safeguarding the shares, Mordashov retained a significant portion for himself, becoming the majority shareholder. This strategic move marked the beginning of his ascent to power in the Russian steel industry.

Under Mordashov’s leadership as CEO, Severstal expanded rapidly, becoming one of the most profitable steel companies in the world. The company diversified its operations, integrating mining and steel production to streamline efficiency and reduce costs. Severstal also ventured into international markets, acquiring steel plants in the United States and Europe. These acquisitions underscored Mordashov’s ambition to position Severstal as a global leader in the steel industry.

However, the political and economic landscape shifted dramatically in the 2010s. Rising tensions between Russia and the West, coupled with economic sanctions imposed after Russia’s annexation of Crimea, forced Mordashov to reevaluate Severstal’s strategy. In 2014, Severstal sold off its U.S. steel plants, marking the company’s withdrawal from the American market. This decision allowed Severstal to focus on its domestic operations, shielding it from further geopolitical risks.

In 2015, after nearly two decades at the helm, Mordashov stepped down as CEO of Severstal, transitioning to the role of chairman of the board. Despite relinquishing day-to-day management responsibilities, he retained a 77% stake in the company, ensuring his continued influence over its strategic direction.

The challenges for Mordashov and Severstal intensified in 2022 when Western sanctions targeted Russian oligarchs and businesses following Russia’s invasion of Ukraine. Severstal reported losses exceeding $400 million that year, a direct consequence of disrupted supply chains, limited access to international markets, and frozen assets.

To mitigate the impact of these sanctions, Mordashov swiftly transferred ownership of key assets, including shares in the leisure company TUI and the mining firm Nordgold. While these moves were widely interpreted as attempts to shield his wealth from further sanctions, they also highlighted his adaptability and pragmatism in the face of adversity.

Beyond Severstal, Mordashov has diversified his investments across various sectors. His stake in TUI, one of the world’s largest travel and tourism companies, underscores his interest in global leisure and hospitality. Additionally, he has invested in energy and technology, reflecting a forward-looking approach to business.

Despite his wealth and influence, Mordashov maintains a relatively low public profile. He is known for his disciplined lifestyle and focus on family. Married with several children, he has emphasized the importance of education and instilled a strong work ethic in his heirs. Some of his children have pursued advanced studies abroad, preparing to potentially take on leadership roles in the family’s business empire.

Philanthropy is another facet of Mordashov’s life. He has contributed to various educational, cultural, and social initiatives in Russia, supporting programs that aim to improve access to education and healthcare. These efforts reflect his belief in giving back to society and fostering development within his home country.

Mordashov’s legacy is a complex one, shaped by both his business achievements and the broader geopolitical context in which he operates. His ability to navigate the challenges of Russia’s post-Soviet transition, expand Severstal into a global powerhouse, and adapt to evolving political and economic realities underscores his resilience and strategic vision.

Today, Severstal remains a cornerstone of Russia’s industrial sector, producing steel that supports construction, infrastructure, and manufacturing. Mordashov’s leadership and foresight have ensured the company’s survival and relevance, even amid turbulent times. As he continues to adapt to the changing landscape, Mordashov’s story serves as a testament to the enduring power of innovation, strategy, and perseverance in the world of business.