Severstal North America receives conditional commitment for $730 M loan from U.S. Department of Energy

Severstal North America (“Severstal”), a subsidiary of OAO Severstal, today announced that it has received a conditional commitment for a $730 million loan from the U.S. Department of Energy.

The proceeds from the loan will be used to design, manufacture, and construct Severstal’s finishing facilities in Dearborn, Michigan, which will produce the next generation of advanced high strength steels (AHSS) for automotive applications.

AHSS is a critical component for Advanced Technology Vehicle manufacturers as they seek to meet U.S Government fuel efficiency goals and crash standards. Upon completion of the modernization projects, Severstal’s Dearborn facilities will include a 2.1 million ton per year coupled pickle line tandem cold rolling mill, a 0.5 million ton per year hot dip galvanizing line, and a 0.5 million ton per year continuous annealing line, all with 72-inch width capability.

In total, Severstal’s AHSS investment will create estimated 2,500 construction jobs, 260 permanent manufacturing jobs, and enable the retention of 1,400 existing manufacturing jobs. In addition, the new facilities, built on a brownfield site in Dearborn, will provide environmental benefits by enabling reduction of petroleum-based fuels consumption and carbon dioxide emissions.

“We are grateful to have received this conditional commitment from the U.S. Department of Energy’s Loan Programs Office. The loan will help advance U.S. manufacturing, create new jobs and support energy conservation efforts. It will allow Severstal North America to build state-of-the-art facilities to produce a broad range of advanced high strength steels for future generations of lighter, more fuel efficient vehicles,” said Sergei Kuznetsov, CEO, Severstal North America.

ОАО Severstal is one of the world’s largest vertically integrated steel and mining companies. With assets in Russia and other CIS, USA, Europe and Africa, 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. Severstal also produced 589 koz of gold at its gold mining assets in West Africa, Kazakhstan and Russia. The company is listed on RTS and MICEX, the company’s GDRs are traded on LSE.