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EVRAZ Signs a Memorandum of Understanding With Russian Railways

EVRAZ plc (LSE: EVR) and Russian Railways have signed a Memorandum of Understanding that outlines a 5-year contract that will come into force in 2013, and will be valid through 2017. During that time, EVRAZ will supply Russian Railways with rail products worth around 90 billion rubles, to include rails up to 100 m long.

EVRAZ ZSMK is completing the final stage of reconstruction of the rail mill to launch production of this new rail type, and as a result the capacity of the rolling mill will increase to 950,000 tonnes of rails a year. The total investment of the project is US$520 million.

The 100-m head-hardened rails are a new product for Russia and the CIS, and are comparable in quality with the products of the world leaders in this sector. They can be used on high-speed railway lines, and on lines with high levels of traffic. The increased length of the rails also allows the reduction of the number of welded joints, which improves both safety and the maximum speed the train can reach.

The reconstruction of the rail mill at EVRAZ NTMK continues, with US$60 million to be invested in the project which — with automated quality control — will allow the production of 25-m volumetric tempered rails with a high purity of surface. After the completion of the project, the volume of rail production at EVRAZ NTMK will increase to 550,000 tonnes per year.

“EVRAZ is reconstructing the rail mills in accordance with the priorities set out in the Strategy for Developing Rail Transport in the Russian Federation,” Ilya Shirokobrod, EVRAZ vice president and head of Division of Railway Products, said. “Our railway products’ segment has excellent prospects for growth. When the reconstruction is over, we will be able to produce rails that meet the highest world standards and the strictest requirements of our customers, and in particular those of Russian Railways, one of our key clients and partners.”


Evraz Group S.A. is a large vertically-integrated steel, mining and vanadium business with operations in the Russian Federation, Ukraine, Europe, USA, Canada and South Africa and employs approximately 110,000 people.