The new concaster is one of the main projects in the plant’s modernization program. The production capacity of the new machine is over 1 million tonnes of 100-mm, 180-mm square and 150-mm round billets annually. The equipment was supplied by Danieli, one of the world leaders in metallurgical engineering.

When the new concaster reaches full capacity, the share of steel billets produced through the continuous casting technology will increase from 30% to 50%. Implementation of this project, with total cost of over US$100 million, is aimed at increasing the performance of Mechel’s steel segment through reducing per tonne steel, ferroalloy, and electric power consumption and significantly improving the quality of finished products.

A portion of the new unit’s output will be allocated to meet the needs of Mechel’s other subsidiary, Beloretsk Metallurgical Plant, in wire rod production and future hardware production. The remaining part will be allocated to manufacturing high added value products at CMP at its rolling mills. Billets produced at concaster No. 4 will be used in manufacturing high quality rebars, including thermo-strengthened rebars. Significant attention was given to the installation of modern environmental protection equipment. Also, implementation of the concasting process, instead of high cost technology for long bar production through casting ingots and further processing them with a blooming mill, increases CMP’s competitiveness with world and Russian steel enterprises.

The startup of concaster No. 4 has completed the sequence of significant events in implementing the large scale technical re-equipment program at CMP in 2006. Phase 2 of the new sinter plant with the annual design capacity of about 4.5 million tonnes was commissioned this year. The project allows CMP to significantly decrease its dependence on the iron ore materials market by utilizing in the sinter process the iron ore concentrate of Mechel’s subsidiary, Korshunov Mining Plant. Also, the new coke battery with the production capacity of about 500 thousand tonnes of coke annually was commissioned at CMP in line with the Company’s overall objective of strengthening its position on the coke market. Concurrent with that commissioning, the Company acquired Moscow Coke and Gas Plant OAO (Moskoks), a major coke producer. Also, the reconstruction of the hot rolling Mill 300-2 was completed, which increased production capacity up to 500 thousand tonnes of rolled products annually. Mill 300-2 will be commissioned during the high market demand period for construction rolled products.

“Putting the steel production on the track of concasting technology is a strategic objective of the Company in improving our steel segment performance,” said Alexey Ivanushkin, Mechel’s Chief Operating Officer. “As part of its implementation, two modern concasters were built at CMP from greenfield over the last four years with the total capacity of over 2 million tonnes of billets annually. A concaster with 500 thousand tonnes annual capacity will be commissioned following its upgrading at our Romanian enterprise, Mechel Targoviste, early next year, bringing share of concasted steel to 100%. We are planning additional projects to increase share of concasting. Further implementation of the modernization program will concentrate on upgrading rolling production capabilities.”