Ecolant announces the signing of SPIC 2.0 for the construction of Russia's first green metallurgy plant

A special investment contract for the construction of the Ecolant electrometallurgical complex in Vyksa, Nizhny Novgorod Region, the first green metallurgy plant in Russia, was signed at the St. Petersburg International Economic Forum.

The ceremony took place on June 4, 2021 at the exhibition stand of the Nizhny Novgorod Region. Electronic signatures under the document were put by the Secretary of State - Deputy Minister of Industry and Trade of Russia Viktor Evtukhov, Governor of the Nizhny Novgorod Region Gleb Nikitin,the head of the local government of the urban district of the city of Vyksa Vladimir Kochetkov and directorAndrey Kukhno, director of Ecolant LLC. The ceremony was attended by the Minister of Industry and Trade of Russia Denis Manetcurov and the initiator of the Ecolant project, Chairman of the Board of Directors of the United Metallurgical Company Anatoly Sedykh.

The special investment contract is concluded for 20 years. According to the document, Ecolant LLC implements a large-scale project using modern technologies and receives tax benefits for income tax and corporate property tax, as well as guarantees of stable working conditions. Benefits will be valid for the entire period of the contract, starting from the moment the taxable base arises. This is the first project in the Nizhny Novgorod region, which is being implemented using the SPIC 2.0 mechanism.

Due to the scale of the metallurgical complex and the involvement of a large number of contractors and equipment suppliers, only during the period of the SPIC, the volume of tax deductions will exceed 30 billion rubles.

“The signing of a special investment contract once again confirms the intention of the state to provide all possible support to businesses aimed at working within the framework of new economic policy principles that take into account modern trends and technologies. The launch of Ecolant will increase the gross domestic product of the region by up to 5%. These funds will go, in particular, to the construction of roads, improvement, repair of schools and hospitals. About 2,000 people will be involved in the construction of the plant, and after the launch of production, more than 700 specialists with a decent salary will work there on a permanent basis, which is also extremely important,” said Gleb Nikitin, Governor of the Nizhny Novgorod Region.

“I thank the Government of Russia, the Ministry of Industry and Trade of Russia, the administration of the Nizhny Novgorod Region for their comprehensive support. The Ecolant project is one of the largest in the Russian metallurgy over the past ten years. This is a unique project from a technological and environmental point of view. Funding is entirely Russian. It was provided by a syndicate of three Russian banks - VEB. RF, Sberbank and Otkritie Bank. Moreover, this was done in the shortest possible time, and we are very grateful to them for this. When deciding to start the project, we, of course, really counted on receiving SPIC 2.0. It makes our project more sustainable. And today, taking advantage of this wonderful occasion, we would like to thank the Government of Russia, which has created such an effective tool to support investment. We have accumulated vast experience in implementing large-scale investment projects, and therefore I am confident in the successful implementation of the Ecolant project,” said Anatoly Sedykh, the project initiator and Chairman of the OMK Board of Directors, at the contract signing ceremony.

The Special Investment Contract 2.0 (SPIC 2.0) is an industrial policy instrument aimed at stimulating investment in industrial production in Russia. Its essence lies in the fact that the state undertakes to stimulate activities in the areas of industry determined by the decree of the Government of the Russian Federation, and the investor, in turn, to implement the project using modern technologies in order to increase the competitiveness of products on world markets.

"Ekolant" is a metallurgical complex without coke-chemical and blast-furnace-converter stages. The steel will be produced from iron ore and natural gas using Direct Reduced Iron (DRI). The project is a single production chain "ore-steel" consisting of DRI, an electrometallurgical furnace and an out-of-furnace processing complex with a capacity of 1.8 million tons of steel per year and two continuous casting machines. The start of production is scheduled for 2025. The main part of the production will be used for the production of wide sheets used in shipbuilding and production of large-diameter pipes for main pipelines at the Vyksa plant of the United Metallurgical Company. Ecolant will also produce blanks for the production of seamless pipes for oil production and railway wheels at the OMK plant in Vyksa.

Ecolanta has no emissions associated with the production of coke, sinter and pig iron. This will make it possible to reduce emissions of carbon dioxide and sulfur oxide into the atmosphere by a factor of three in comparison with the traditional BOF production technology. For the first time in Russia, at one production site, the iron ore-steel technology will be presented with a continuous supply of hot reduced pellets to an electric arc furnace. The uniqueness of the complex is characterized by the fact that hot metallized pellets immediately enter the arc furnace, and the resulting steel goes to out-of-furnace processing and casting. This will be the first such plant in Europe.

The total cost of the project implementation is about 150 billion rubles. Part of the funds for the project will be provided by VEB. RF, Sberbank and Otkritie Bank as part of VEB.RF's Project Finance Factory.

In addition to the electrometallurgical complex itself, the project includes the creation of related infrastructure. The complex will have a high socio-economic effect for the region. After the expiration of the special investment contract, Ecolant's work in synergy with other industries will make it possible to pay about 5 billion rubles. taxes per year.