Mechel OAO (NYSE:MTL), one of the leading Russian mining and metals companies, announces that Electric Arc Furnace No. 2 at its Tikhvin Ferroalloy Smelting Plant (JSC "TFZ") was started up after its repair.

Electric Arc Furnace No. 2 at Mechel's Tikhvin Ferroalloy Smelting Plant subsidiary was commissioned on May 27, 2009. Thus, three electric arc furnaces (EAFs) currently operate at the plant with only one EAF remaining in stand-by mode.

JSC "TFZ" is the youngest ferroalloy smelting plant in Russia. It comprises four EAFs with 22.5 MVA capacity each, which are designed to smelt high-carbon ferrochrome. The process of the furnaces commissioning took place from April 2007 to April 2008.

From October 2008, the plant's operations were limited due to decrease in demand for its products and increased prices for imported chrome ore. From October 2008 to May 2009, ferrochrome was smelted with only two furnaces operating with underutilization of their capacities. Owing to such measures, the plant managed to keep its operability and staff composition. During that time, scheduled maintenance was performed by the plant's own personnel, which enabled increasing the equipment's effectiveness. Specifically, the plant's water-cooling system has been repaired and gas cleaning system tubes have been replaced with those capable to operate under higher temperature, which improved quality of waste gas treatment.

From January 2009, steady supplies of high quality chrome ore commenced from the new Voskhod Chrome Mining Plant (Kazakhstan), which is a part of Mechel's ferroalloy sub-holding, Oriel Resources Ltd. At the same time, increase in demand for high-carbon ferrochrome was observed on the markets from April 2009. Combination of these two factors made it possible to increase utilization of the plant's capacity.

"The increased utilization of capacities of our ferroalloy subsidiaries, Tikhvin Ferroalloy Smelting Plant and Southern Urals Nickel Plant (commissioning of the latter's shaft furnace No. 8 was announced previously) proves that our ferroalloys segment development strategy and our anti-crisis program are quite efficient. We supported each of the Group's ferroalloy plants with its own raw material base and thus ensured our independence from expensive imported ore. It also enabled us to fully utilize our production chains' synergy. The scheduled maintenance works performed during the period of lower demand allowed us to increase performance of the equipment. And, at last, careful monitoring of the market situation allowed us to promptly respond to the demand growth taken shape and to increase utilization of the equipment in a view of the orders available in our order book," Mechel OAO Senior Vice President Vladimir Polin commented.

Mechel is one of the leading Russian companies. Its business includes four segments: mining, steel, ferroalloy and power. Mechel unites producers of coal, iron ore concentrate, steel, rolled products, ferroalloys, hardware, heat and electric power. Mechel products are marketed domestically and internationally.