Russian mining company Mechel OAO announced that it has launched the universal rolling mill at Chelyabinsk Metallurgical Plant. The company invested about $715 million in the project. Italy's Danieli will supply equipments for the mill, while China's Minmetals will be the main contractor for the mill.
The mill will produce high-quality structural shapes and rails of length 12.5 to 100 meters. The mill, which is expected to produce up to 1.1 million tons of finished product a year, possesses all the technical know-how, necessary equipment as well as quality control technologies. The company has installed advanced technologies in the plant and removed the old ones, thus reducing environmental hazards. The project has also led to the creation of about 1500 jobs.
The rails produced at the mill will be supplied to Russian Railways OAO as a part of the agreement signed by Mechel and Russian Railways OA and approved by the Russian government. As per the contract Chelyabinsk Metallurgical Plant will provide annual rail supplies of up to 400,000 tons until 2030.
The new rails produced at the plant will be superior than its foreign counterparts due to its resistance to low temperatures, high wear and contact resistance. The launch of universal rolling mill will also cater to the needs of the Russian customers interested in its products. Mechel remains optimistic about the project and expects its financial results to improve once the mill reaches its project capacity.
Mechel retains a Zacks Rank #4 (Sell).
Other companies in the steel industry with favorable Zacks Rank are Kobe Steel Ltd. (KBSTY - Free Report) ), Shiloh Industries Inc. (SHLO - Free Report) and Nippon Steel & Sumitomo Metal Corporation (NSSMY - Free Report) . All of them hold a Zacks Rank #1 (Strong Buy).