OREANDA-NEWS. OAO Severstal’s (“Severstal”) investment proposal for the construction of a rolled section steel mini-mill has been approved by an Investment Council under the Governor of Nizhniy Novgorod Region.

It is anticipated that the rolled section steel mini-mill will be built on an industrial site in Dzerzhinsk, Nizhniy Novgorod Region. The new mill’s annual output will be 1 million tons. The project will create about 400-500 new jobs. Preliminary projections show that total investment in the project will amount to approximately US$500 million. The final decision on the realization of the project will be taken after a tender for the assignment of lands.

The project’s environmental controls will ensure a neutral environmental impact, as the mill’s electric furnace will be working on scrap, thereby eliminating the first process stage. Moreover, the mini-mill will be equipped with state-of-the-art air filtering systems. It is also planned that industrial water supplies will be organized in three closed cycles without waste water disposal, and that solid wastes will be recycled.

Commenting on the decision to build the mini-mill in Nizhniy Novgorod Region, A. Kruchinin, General Director of Severstal’s Cherepovets Metallurgical Plant, noted the favourable investment environment in the region: “In addition to availability of a convenient industrial site, it offers optimal logistics: access to the Volga, Russia’s main water artery, and adequate throughput capacity of railroads and motorways.”

As for the product mix, A. Kruchinin said: “Today construction remains the fastest growing market segment, and analysts insist that this upward trend will persist. By 2010, the Volga Federal District - as well as the Central and North-Western Federal Districts – will be experiencing a shortage of construction rolled section steel. The high-quality reinforcement metal production experience accumulated by Severstal at Cherepovets Metallurgical Plant offers a solution to this problem. Even today the share of high-quality thermostrengthened reinforcement metal, the type enjoying the highest market demand, in total CMP output delivered to construction companies stands at about 80%.”

The Dzerzhinsk project will become Severstal’s second Russian project of this kind after the recent announcement of plans to build a similar rolled section steel mini-mill in Saratov Region. As was reported earlier, Severstal has already been involved in such projects in the past.

The first mini-mill, built with Severstal’s participation over a period of two years, will commence operations in the state of Mississippi, USA, this autumn.