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Ecolant, a company of Russian steel pipe and railway wheel producer OMK owner Anatoly Sedykh, told S&P Global Platts it has broken ground on Rb150 billion ($2 billion) direct reduced iron (DRI)-fed 1.8 million mt/year EAF mill in Vyksa, Nizhniy Novgorod oblast, central Russia.

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The design, manufacture and installation of the main process equipment is being carried out by Italian and Austrian engineering companies Danieli and Primetals.

The 1.8 million mt/year steel output will be fed with in-house made DRI in the amount of 2.5 million mt/year.

To produce its own power, DRI and steel when online in 2025, the plant will source 3.5 million mt/year of domestically produced DR-grade pellets and natural gas, both plentiful in Russia. Later, it might be adapted to use hydrogen.

All in all, Ecolant will build 100 facilities relating to eight technological lines: DRI production, steelmaking, air separation, water treatment, lime-burning, processing of by-products, railway and automobile logistics, and energy supply.

The core lines will be based on Energiron -- the innovative HYL DR technology jointly developed by Argentinian engineering company Techint and Danieli of Italy. It boasts one of the lowest CO2 footprints and provides for 24 MW generation.

Equipment units will start arriving this year with the last pieces to be received in 2023 for the plant to be up and running in 2025.

The meltshop will be equipped with two continuous casting machines -- one for slab and the other for round billet and bloom. The semis ratios in the mix will depend on the requirements of their chief offtaker -- OMK-owned Vyksa Metallurgical Plant (VMZ), also in Vyksa.

VMZ makes a variety of products from both own steel and externally sourced slabs and blooms, and from 2022 -- when it commissions 500,000 mt/year seamless pipe mill -- it will also need pipe billet.

To utilize its plate rolling capacity, OMK relies on slab supplies from NLMK's Novolipetsk Iron and Steel Works, while its railway wheel production processes blooms provided by Ural Steel, part of Metalloinvest.

In 2020, OMK made 1.25 million mt of crude steel with its EAF meltshop running flat out. Its finished output -- comprised of welded pipes, railway wheels, plate, leaf spring, pipeline fittings and steel structures -- is estimated at 2 million mt. Third-party steel covered 40% of OMK's requirements in unprocessed feedstock.

From late 2022-2023, with the ramp-up to the design capacity of the newly built OCTG mill, OMK will need to purchase 500,000 mt more steel, anything from 1.3 million-1.5 million mt/year depending on its production program.

With Ecolant online, the company should become fully self-sufficient in raw steel.

With its commissioning, the Russian steel industry will gain a competitive edge and make headway towards decarbonization. The plant's low carbon steel is meant to help its end-users progress with their own their climate-related targets, according to Sedykh.

Several Russian industries, including transport and energy, will benefit from buying rolled products made of Ecolant steel thanks to its production fully satisfying even global green agenda, the Ecolant and OMK owner believes.

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