Following the initial announcement on February 22, on Tuesday, February 26, Russian mining and steel producing company Mechel signed a long-term agreement with Russian Railways for the supply of rolled products for transportation purposes, which will be manufactured by Mechel's subsidiaries.
Under the terms of agreement, Mechel will set up a new, modern rail and structural steel mill at its Chelyabinsk Metallurgical Plant subsidiary over the next two years with an annual production capacity of over one million metric tons. The new mill, among other products, will be able to manufacture railway rails of up to 10 meters in length. Mechel plans to invest more than $500 million in the development of new production.
According to the deal, Mechel will supply about 400,000 metric tons of rails to Russian Railways, including products especially designed for high-speed operation, enhanced durability and contact wear resistance, and which can also be used in low-temperature environments.