OREANDA-NEWS. June 01, 2012. EVRAZ plc (LSE: EVR) and Russian Railways have signed a Memorandum of Understanding that outlines 5-year contract that will come into force in 2013, and will be valid through 2017. During that time EVRAZ will supply Russian Railways with rail products worth around 90 billion rubles, to include rails up to 100 metres long.

 EVRAZ ZSMK is completing the final stage of reconstruction of the rail mill to launch production of this new rail type, and as a result the capacity of the rolling mill will increase to 950 thousand tonnes of rails a year. The total investment of the project is 520 million US dollars.

 The 100-metre head-hardened rails are a new product for Russia and the CIS, and are comparable in quality with the products of the world leaders in this sector. They can be used on high-speed railway lines, and on lines with high levels of traffic. The increased length of the rails also allows the reduction of the number of welded joints, which improves both safety and the maximum speed the train can reach.

 The reconstruction of the rail mill at EVRAZ NTMK continues, with 60 million US dollars to be invested in the project which – with automated quality control - will allow the production of 25-metre volumetric tempered rails with a high purity of surface. After the completion of the project the volume of rail production at EVRAZ NTMK will increase to 550 thousand tonnes per year.

 “EVRAZ is reconstructing the rail mills in accordance with the priorities set out in the Strategy for Developing Rail Transport in the Russian Federation,” - Ilya Shirokobrod, EVRAZ Vice-President and Head of Division of Railway Products said. “Our railway products’ segment has excellent prospects for growth. When the reconstruction is over we will be able to produce rails that meet the highest world standards and the strictest requirements of our customers, and in particular those of Russian Railways, one of our key clients and partners”.