Mechel, one of the leading Russian mining and steel producing groups, has announced that its subsidiary Chelyabinsk Metallurgical Plant has signed a railway supply contract with Russian Railways (RZhD) for the period of 2010-2030. The agreement is in line with the long-term partnership agreement signed between Mechel and RZhD on February 26, 2008.
According to the contract, Chelyabinsk Metallurgical Plant is to supply a minimum 400,000 mt of railroad rails up to 100 meters in length and of structural steel, which represents the plant's full production capacity.
Commenting on the contract, Mechel's CEO Igor Zyuzin stated: "Signing the contract to supply rail products to RZhD is the next step in implementing our long-term partnership program. To ensure its successful implementation of the program, Mechel collaborates with one of the world leaders - Danieli, Italian manufacturer of equipment, and Minmetals, China's state-owned industrial corporation. In collaboration with these companies, Mechel is constructing a rail and structural steel mill at its Chelyabinsk Metallurgical Plant subsidiary and is implementing unique technology, unparalleled in Russia, to produce high quality rails that conform to the most stringent requirements set by RZhD. Mechel plans to invest more than $500 million in the new production development."