EVRAZ Signed a Memorandum with Russian Railways (5489E)

TIDMEVR

RNS Number : 5489E

Evraz Plc

31 May 2012

EVRAZ has signed a Memorandum of Understanding with Russian Railways

31 ay 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".

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For further information:

Investor Relations: Alexander Boreyko Director, Investor Relations

 London: [phone]          Moscow: [phone] 

[e-mail]

Media Relations: Oleg Kuzmin VP, Corporate Communications

London: [phone]          Moscow: [phone] [e-mail] 

EVRAZ is a vertically integrated steel, mining and vanadium business with operations in the Russian Federation, Ukraine, USA, Canada, Czech Republic, Italy and South Africa. EVRAZ is among the top 20 largest steel producers in the world based on crude steel production of 16.8 million tonnes in 2011. In 2011 EVRAZ sold 15.5 million tonnes of steel products. A significant portion of the Group's internal consumption of iron ore and coking coal is covered by its mining operations. The Group's consolidated revenues for the year ended 31 December 2011 were US$16,400 million and consolidated adjusted EBITDA amounted to US$2,898 million.

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