OREANDA-NEWS. February 15, 2008. OAO Severstal (RTS: CHMF, LSE: SVST) has announced today preliminary information regarding the initial operational impact related to the outage of “B” Blast Furnace at its Severstal North America, Inc. (“SNA”) subsidiary in Dearborn, Mich. 

SNA’s “B” Blast Furnace, the smaller of two blast furnaces used to produce pig iron for subsequent conversion to steel, has been shut down following a breach of the Furnace’s shell. This has resulted in an approximate 35% reduction of SNA’s overall production volume.

The Company expects to refurbish “B” Blast Furnace in full and estimates that the outage and decline in overall production will last for 18-24 months.

 “C” blast furnace is operating as planned and production is expected to reach capacity late in Q308.

As part of Severstal’s recently announced US$1 billion investment in North America, the modernization of SNA’s production for the manufacture of a wider range of automotive steel sheet products and grades remains on track. The modernization process supports SNA’s continued adherence to strict internal and external safety standards and is planned to improve the overall efficiency of operations.

Alexey Mordashov, CEO of OAO Severstal, said: “Our investment in SNA is a key aspect of our overall business. We remain focused on building a thriving business in North America and SNA plays an important role in our growth strategy.”

Severstal will continue to report on further material developments at SNA as they arise.