RUSSIA INDUSTRIAL BRIEFS

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Researched by Industrial Info Resources

ECONOMY

Industrial Output Hits Record 10.9% Growth in June

Russia’s industrial output grew by a record 10.9% in June compared to June 2006, and gained 7.7% in the period January-June. The last time industrial production growth topped 10% was in May 2006, the Federal State Statistics Service said. In the second quarter manufacturing expanded 7%, but only 4.5% for the first half of the year. Production and distribution of electricity, water and gas increased 4.9% in the second quarter and 5.7% for the six months. Mining rose 2.3% in the first six months; coal fell 0.7% to 152 million tons; oil was up 3% to 243 million tons (1.78 billion barrels) and gas rose 0.1% to 333 billion cubic meters. Electricity generation rose 0.4% to 506 billion kWh and auto manufacture rose 9.5% to 604,000 vehicles. In the second quarter 2007 industrial output grew 6.7% compared to 8.4% for the second quarter 2006.

METALS & MINERALS

Million Ton Mini Steel Mill

Severstal, the country’s largest steel company, plans to build a minimill in the Saratov region. The $500 million project will produce 1 million tons of reinforced steel per annum and is schedule to start operation in 2010. The minimill will use metal scrap as feedstock eliminating the first ‘black’ processing cycle, which will reduce the environmental impact to zero. Severstal is a vertically integrated steel company with production facilities in Russia, Europe and the U.S.

POWER

$300 Million In - $300 Million Out for Power Company

Technopromexport, Russia’s state controlled power plant builder is set to hold an initial public offering (IPO) in the second half of 2008 to raise at least $300 million. The company builds hydraulic, thermal, geothermal and diesel power plants, and power transmission lines in 50 countries and was included in a list of companies to be privatized in 2008. The ministry for economic development and trade may contribute the unfinished Krapivinsky hydropower project in West Siberia to the company’s charter. The estimate for finishing the project is $300 million.

Vattenfall Studies Mosenergo’s Power Plant Options

Vattenfall Europe PowerConsult has won a contract to draft a feasibility study to build the Petrovsky State District Power Plant - GRES, the Russian power utility Mosenergo reports, Vattenfall will evaluate three main options for construction of the power station and present the study before December. The project is part of the third stage of Mosenrgo’s long term investment program. The first unit is scheduled to go into operation in 2012. Mosenergo is one of Russia’s largest power companies with 17 power stations and a total capacity of 10,600 MW.

Nuclear Energy Industry Develops with New Reactors

A fast neutron BN-800 reactor will be built for the Beloyarsk nuclear power plant by 2012 reports Russia’s atomic energy agency. The project is part of the federal program for the development of the nuclear energy industry and the BN-800 reactor project is estimated to cost $2 billion. A 1,200 MW VVER (light water pressurized reactor) power plant will be constructed to replace the Leningrad nuclear power plant’s 1,000 MW RBMK (high power channel reactor) unit, which has reached the end of its life. Estimated cost for the new plant is $2 billion with subsequent units of the same type being 25% cheaper.

TRANSMISSION

Siberia to Europe Power Line project

RAO UES (Unified Energy System of Russia) is working on a project to build a power transmission line from Siberia to Europe. This would allow Siberia’s reserve surplus of power to feed the power hungry regions of central Russia and Europe. A radical enhancement of the power grid is envisaged in the master plan for the country’s power sector facilities through 2020. A direct current line transmission line from Siberia to Europe will be built along the alternate current transmission line. The level of technical sophistication required is massive and an effort will be made to move from the current pre-design stage to the project stage.

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