Mechel Announces Agreement On a Long-Term Partnership With Russian Railways

Mechel  announced that it has signed an agreement on a long–term, mutually beneficial partnership with Russian Railways (RZhD OAO). Mechel will provide RZhD with rolled products for transportation purposes, which will be manufactured at Mechel’s subsidiaries.

Under the agreement, Mechel will construct a modern rail and structural steel mill at Chelyabinsk Metallurgical Plant (CMP OAO) over the next two years with the annual capacity of over 1.0 mln tn of high value added products. The new equipment will enable Mechel to manufacture, among other products, railroad rails up to 100 meters in length using state of the art technologies for steel melting, rolling, tempering, straightening, finishing, and rail quality control. Technical solutions will enable manufacturing products that surpass their world analogues in a number of key parameters, which are determined by the climate conditions of the rail service in Russia.

Rail manufacturing volume for RZhD will be up to 400 thousand tn annually and include product specifically designed for high-speed operation, enhanced durability and contact wear resistance, and for operation at a low temperature environment.

Mechel will obtain the necessary certificates for safe use of the rails in the railway system and will carry out work systematically under the programs, which will be aimed at enhancing rail production technology.

RZhD will construct a complex rail welding train (RWT) and an approach track following the legal completion of its land relationship with CMP OAO in 2008. The complex will be commissioned in 2010.

To ensure a smooth production process at Mechel’s Chelyabinsk Metallurgical Plant, RZhD undertakes to continuously deliver the rolling stock, including its own rail carrying cars, to be used for shipping finished products.