OREANDA-NEWS. On May 07, 2008 Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announced that its subsidiary, Southern Urals Nickel Plant OAO, and Bateman Engineering have signed a contract on the construction of a new melting complex for Mechel’s nickel plant, reported the press-centre of Mechel.

The contract, which is signed in accordance with the investment program of Southern Urals Nickel Plant, provides fundamental re-equipment of the plant and includes the design and supply of a 12 MW DC furnace. The furnace will be erected at Southern Urals Nickel’s existing facility. The total project value is US\\$31 million.

The fixed price contract will be performed against a defined scope of work for small-scale industrial furnace-complex equipment for the production of ferronickel. The contract will also include a basic engineering package for the entire process plant and detailed design and supply of the core technology equipment for the 12 MW DC furnace. Work is expected to commence in the nearest months and the project is due to be completed by the end of 2009.

The 12 MW plant will be designed to include the latest proven technology in the field of ferro smelting and environmental protection. The technology has been designed by employing a holistic process approach to achieve low operating costs and high recoveries along with high levels of reliability.

“The Southern Urals Nickel Plant has embarked on a modernization and expansion program for its nickel operations in order to boost production and operate efficiently. The 12 MW furnace is the first phase in this program whereby, in addition to producing a quality saleable product, it will be used to assess the commercial viability of a significantly larger project,” Mechel Management OOO Chief Executive Officer Vladimir Polin commented.