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Novolipetsk Steel to spend US$80M on Pa. steel plant upgrade

OJSC Novolipetsk Steel intends to build a new walking-beam reheating furnace to streamline the slab heating process at NLMK Pennsylvania LLC, a plant with a production capacity of 1.7 million tonnes of hot-rolled steel per year.

The new furnace, expected to become operational in 2018, will replace three outdated pusher-type furnaces that are now operational at the facility and will significantly increase the quality of finished steel products, it said on Dec. 26.

The project is expected to cost US$80 million, with construction and installation works planned for the third quarter of 2017.

Novolipetsk estimated that the project will increase EBITDA by US$29 million per year. The company's EBITDA in the third quarter jumped 32% year over year to US$673 million.

The installation of the new equipment will not affect the facility's current production plan, the company noted.

The project also includes the construction of a warehouse for slabs supplied by Novolipetsk.

NLMK USA CEO Bob Miller said the new furnace will also result in about a 45% decrease in natural gas consumption and a reduced emission rate.