Mechel, one of the leading Russian mining and steel producing groups, has announced that it has concluded an agreement with one of the three largest banks in Russia, namely Gazprombank, for the financing of the construction of a rail and structural steel mill at its subsidiary Chelyabinsk Metallurgical Plant.
According to the agreement, Gazprombank will lend a total of $255 million in credit to Mechel.
As SteelOrbis previously reported, the new rail and structural steel mill, with an annual production capacity of more than one million mt of railroad rails and structural shapes, is to be built by Chinese state industrial corporation MinMetals Engineering Co. Ltd, and is scheduled to be commissioned at the end of 2010. Total investments in the project amount to more than $500 million.
From 2010 up to 2030, Chelyabinsk Metallurgical Plant will annually supply a minimum of 400,000 mt of rails to Russian Railways (RZhD OAO) within the scope of the long-term partnership signed with Mechel and RZhD OAO in February 2008.