The world's largest steelmaker ArcelorMittal has announced the conclusion of an investment agreement with the administration of Russia's Tver region for the construction of a new greenfield longs producing mill in the region.
According to the terms of agreement, the region's authorities will provide ArcelorMittal with the land required for the construction of the new steel plant, which will consist of an EAF having an annual production capacity of one million metric tons, and also two bar mills.
The project will be implemented in two phases. During the first phase, a bar mill with an annual production capacity of 600,000 metric tons of rebar and merchant bars will be constructed. The work on the first phase will commence during the second quarter of 2008. The mill will be put into operation by the beginning of 2010, when it is expected to generate 200 direct and 400 indirect jobs. The first phase will require $100 million in investment.
The feasibility study on the second phase of the project is expected to start in the near future.
This current attempt by ArcelorMittal to enter the Russian metallurgical industry is the second attempt made by the company this year. At the end of September, ArcelorMittal applied to participate in the auction for a 68.86 percent stake in Elgaugol and a 75 percent minus one share stake in Yakutugol, both of which are located in the Russian Federal Republic of Sakha Yakutia (Yakutia). However, ArcelorMittal's application was refused by the Russian authorities for undisclosed reasons. According to market rumors circulating at the time, the application of the international steel giant was refused due to the implementation of a protectionist policy by the authorities in support of domestic steel producers.
ArcelorMittal's latest bid to enter the Russian steel industry may register greater success than their last one. Considerable growth is expected in steel demand in Russia in the coming years, especially due to the preparations for the 2014 Winter Olympics which are to be held in the country.