OREANDA-NEWS. On August 18, 2008 Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announced the launch of a medium-section mill at its Mechel Targoviste facility (Targoviste, Romania) following the execution of fundamental renovations, the press-centre of Mechel reported .

Implementation of this project was performed within the scope of an extensive program for modernization of production at Mechel Targoviste, which has been consistently carried out at the facility. This program includes the upgrade of a heat-treatment furnace and the mill itself. Investment in equipment upgrading in facility shop for medium-section rolled products amounted to 8.7 million euros (US12.8 million). The works were performed to improve finished product quality and to significantly reduce production costs.

Originally, the medium-section mill was designed for product dimensions from 80х80 mm to 140х140 mm. Following the modernization program, the mill is now also capable of rolling products with dimensions of 150х180 mm produced by a continuous-casting machine that was installed in the facility in March of 2007. Transition to these new product dimensions resulted in an increase in roll train efficiency and enhanced shrinkage to obtain the desired structure of finished products. Upgrading will also allow Mechel Targoviste to reduce natural gas consumption and to significantly improve the quality of its end products.

Two additional mill stands were mounted on the mill. In addition, new equipment for water descaling, a product tipping device and new mill rolls were installed. Installations performed on the mill’s heat-treatment furnace include new equipment for automation of the product heat-treatment, product-weighting system, the hydraulic system for the furnace floor and product input and output systems, and new system of furnace burners and combustion.

The Company expects the cost savings from the renovation to total approximately 2.3 million euros per year (US 3.4 million).

The upgraded equipment launch in the rolling-mill shop was timed to Metallurgist Day, celebrated in Romania annually on the third Saturday of August.

Vladimir Polin, Chief Executive Officer of Mechel Management Company OOO, commented: “The completion of this project continues the series of Mechel investment projects targeted at fundamental modernization of the group’s steel and rolling production assets in Romania. In particular, in Mechel Targoviste a new arc furnace and a new continuous-casting machine were launched in 2006 and 2007 respectively.

These efforts improve the mill’s production efficiency and as a result its financial strength. Mechel management has again demonstrated the ability to transform an older, inefficient asset and adapt it to a highly competitive market. In Romania, Mechel owns four steel facilities, and in each of these the Company is actively working to modernize the equipment and enhance operational efficiency.”