Mechel wants to attract Rosnano governmental corporation to its high-speed 100-m rail production project. Rosnano has ingnored the offer to participate as a technological partner and co-investor, for Mechel still lacks investment approval by its experts.

Mechel signed an agreement with Russian Railways to deliver no less than 400 t of its products annually to this monopolist. To fulfill its obligations, Mechel plans to install a rail mill at ChMK (Chelyabinsk). Initial investment was estimated as $500+ m, later estimation amounting to $700 m. The launch of the project has been postponed to 2nd halfyear of 2011 due to the ongoing economic recession.

The project is partly financed by Gazprombank providing $225 m, while Mechel expects to obtain more from Rosnano. Nanotechnologies to be employed in rail production would enable a substantial increase in train speed.

Theme:  Finance/Iron/Russia