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Mechel Enters Financing Agreement for Universal Mill Project at Chelyabinsk Subsidiary
Jan. 14, 2009 Mechel OAO has entered into an agreement with Gazprombank OAO to arrange for the financing of a universal rolling mill installation project at its Chelyabinsk Metallurgical Plant OAO (CMP OAO) subsidiary.
In December 2008, when Mechel Group incorporated CMP OAO, Gazprombank OAO signed the agreement for financing the universal rail and structural steel mill construction under the contract between CMP OAO and Minmetals Engineering Co. Ltd, China.
Pursuant to the agreement, Gazprombank OAO will provide fundraising services up to US$255 million, with financing provided in the form of credits.
Danieli will supply the main equipment for CMP OAO’s new universal rail and structural steel mill, which will have an annual capacity of over one million tons of rails and structural shapes. Implementation of the construction project includes a contract between RZD OAO and CMP OAO for rail products supply from 2010 to 2030, which was signed in November 2008. The total investment for the mill will amount to more than US$500 million.
Commissioning of the mill is expected at the end of 2010.
Mechel, one of the leading Russian mining and metals companies, unites producers of coal, iron ore concentrate, steel, rolled products, ferroalloys, hardware, heat, and electric power. Its business includes four segments—mining, steel, ferroalloys and power—and its products are marketed domestically and internationally.