November 16, 2011

Severstal Columbus Unveils $550 Million Phase II Facility Expansion

Severstal North America, a subsidiary of OAO Severstal, one of the world’s largest vertically integrated steel and mining companies, celebrated the Grand Opening of its Phase II expansion in Columbus, Miss.

The $550 million expansion project at Severstal Columbus will increase annual steel production to 3.4 million tons (3.1 million metric tons) doubling the plant’s steelmaking capacity. The expansion project included a second electric arc furnace, ladle metallurgy furnace, caster, tunnel furnace, and hot-dip galvanizing line. A wide heavy gauge push pull pickle line was also included in the Phase II project. 

Severstal’s investment in Columbus has assisted in jumpstarting economic growth in the state of Mississippi, creating jobs and attracting steel and scrap processors to its industrial park in Lowndes County.

Alexey Mordashov, CEO of OAO Severstal together with Sergei Kuznetsov, CEO of Severstal North America hosted a ribbon cutting ceremony to celebrate Severstal Columbus’ new capabilities with customers, suppliers and government officials. Newly-elected Governor of Mississippi, Phil Bryant, attended the Grand Opening, along with Delbert Hosemann, Mississippi Secretary of State.

The event included welcoming remarks from Governor-elect Bryant, Mordashov and executives of Severstal North America. Guests were escorted on tours of the most modern flat rolled mini-mill in North America.

“I appreciate Severstal’s commitment to Mississippi and the creation of 150 additional jobs with the Phase II expansion,” Bryant said. “Mississippi’s skilled talent and business-friendly environment prove that we have the environment and workforce that can sustain long-term growth.”

Mordashov expressed, “Severstal Columbus is a critical part of our worldwide strategy to carefully steward our resources, move closer to our customers, and develop advanced technologies that will help us become the industry’s leading low-cost producer of high quality steel”.

Severstal Columbus features the newest and most advanced electric arc furnace facility in the world. With Phase 1 completed in 2007 at cost of $880 million, Severstal Columbus is in the vanguard of the ‘”mini-mill” movement utilizing technology that recycles scrap steel into product suitable for the auto industry, pipe and tube, appliances and other applications. The operation currently employs over 650 employees.

“The addition of Phase 2 allows us to increase sales to the market sectors where we were not actively present. We gained broad capabilities in heavy gauge pickled and galvanized products which we are now able to offer to the customers in both master coil and sheets or slit-to-ustomer order. The launch demonstrates Severstal’s faith in U.S. economy and our commitment to domestic manufacturing, our customers, employees and communities,” Kuznetsov noted.

The Grand Opening of Phase II was the perfect way for Severstal’s customers, suppliers and localcommunity leaders to celebrate the positive impact the company has had in the area. Bringing hundreds of high-paying jobs and over a billion dollars of industrial investment, Severstal has helped toposition the Golden Triangle region of Mississippi to compete in both local and global steel markets.

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ОАО Severstal is one of the world’s leading vertically integrated steel and steel related mining companies, with assets in Russia and the USA, in Ukraine, Latvia, Poland, Italy, Liberia and Brazil. Severstal’s gold business, Nordgold was established in 2007 and comprises mines and exploration projects in Russia, Kazakhstan, Burkina Faso and Guinea.Severstal is listed on RTS and MICEX and the company’s GDRs are traded on the LSE. Severstal reported revenue of $13,573 million and EBITDA of $3,263 million in 2010. Severstal’s crude steel production in 2010 reached 14.7 million tonnes. www.severstal.com

Severstal North America is a major steelmaker in the United States and specializes in the full range of the high quality light flat rolled products. Fully integrated operations and corporate headquarters are located in Dearborn, Michigan. A new state-of-the-art electric arc furnace operation in Columbus, Mississippi serves the growing demand for steel in the southeastern United States. Severstal North America also has several joint ventures for the high quality, value-added coated products, as well as a jointly owned coke-making facility Mountain State Carbon. Severstal North America is a wholly-owned subsidiary of OAO Severstal, one of the world’s largest vertically integrated steel and mining companies. Visit our website at www.severstalna.com or follow us on Twitter at http://twitter.com/#!/SeverstalNA