8 Feb 2018 10:30

Torex, Chinese consortium sign agreement on Far East metals cluster

KHABAROVSK. Feb 8 (Interfax) - The Torex Group of Companies and a consortium of Chinese investors signed a letter of intent on Wednesday to cooperate and collaborate on the implementation of a project to restructure the production facilities of Amurmetal in Komsomolsk-on-Amur, the sole iron and steel enterprise in Russia's Far East, the Far East Development Ministry said.

The agreement was signed in Harbin by representatives of Torex, Tangshan Shunli Industrial Group, Beijing-based China Metallurgical Engineering Corporation, and Hong Kong-based steelmaker Debang Guangdong International.

The foreign investors are also considering the possibility of building an industrial park around the Russian steel plant, the ministry said.

The project is expected to expand the plant's production capacity and output, as well as its product range.

It was reported earlier that specialists from metallurgical engineering company MCC CERI have already inspected the facilities and surveyed the territory earmarked for future development. The plan for the modernization of the Amurmetal plant, the centerpiece of the metals cluster project, will be drawn based on that data.

The plant is capable of producing 2.5 million tonnes of output a year, MCC CERI concluded.

Torex and Debang Guangdong, representing the interests of a consortium of Chinese investors, plan to create a metallurgical cluster in Russia's Far East at a cost of up to $5 billion, with up to 5 million tonnes of capacity a year. Potential project investors are Sinosteel Corp (a state-owned steelmaker), Rizhao Steel Holding Group (a private sector steelmaker in Rizhao) and Jianlong Group. The project aims to produce high value-added output for sale on Russia's domestic market and for export to Southeast Asian countries and the Asia-Pacific region. The consortium's 10-year outlook is to raise production to 30 million tonnes a year.

The parties plan to begin implementing the project using existing Amurmetal capacity, which will be modernized.

Torex and Debang Guangdong have already signed a letter of intent on the project.

Torex board chairman Pavel Balsky said that Amurmetal is currently operating at 50% of capacity. The plant has two production lines, each with capacity to produce 1 million tonnes a year.

Amurmetal utilizes electric steelmaking technology for subsequent production of long and flat steel products. Its main feedstock is metal scrap. The plant entered receivership in October 2013, for a period that has been repeatedly extended. Torex-Khabarovsk acquired the enterprise's property in January 2017. Steel production was launched at the end of July.

Torex specializes in processing waste and iron and steel scrap.