OREANDA-NEWS. June 18, 2008. Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces that its subsidiary, Vyartsilya Metal Products Plant ZAO and German-based company Ernst Koch GmbH have signed an agreement under the terms of which Koch will supply and install a new straight-flow KGT 25/47 type drawing mill for the Vyartsilya Metal Products Plant.

The straight-flow sevenfold drawing mill for low-carbon wire manufacturing of 2.0-7.0 mm in diameter will be making the product in coils of up to 3 tonnes in weight. High productivity of the equipment will be achieved through several technical advantages, such as an intensive refrigerating system and computerization of quality control system. The new mill commissioning would enable the Vyartsilya Metal Products Plant (VMZ) to increase its monthly average output volume by 1.5 thousand tonnes.

The mill startup will allow for increasing the plant’s production capacity and product quality as well as improving working conditions for the equipment operators.

Preparation for the installation of the new equipment is being carried out at VMZ. In addition, specialists are being trained to properly operate the mill at Mechel’s Beloretsk Metallurgical Plant in Beloretsk, Russia.

In line with the investment program for VMZ, several new nail-making machines were commissioned that enabled the plant to improve its production quality and effectiveness. The mill for unoiled wire production (a new high margin product, which is being exported by the Mechel’s subsidiary) was also modernized.

Completion of the technological modernization program for VMZ will enable the facility to improve the quality of the Plant’s production, increase output volume, reduce production costs and provide extra income.