NLMK (LSE: NLMK) has successfully closed a credit agreement for a total of EUR93 million with a maturity of 10 years.

The facility will be used to finance NLMK Group’s capex program, notably to complete the construction of its Kaluga Mini-Mill, which is part of the Group’s Long Steel Division.

The credit will be backed by Hermes, the German ECA, and SACE, the Italian ECA, with Société Générale acting as arranger and Hermes agent, and Deutsche Bank acting as arranger and SACE agent.

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The Kaluga Mini-Mill project is included into the list of top-priority investment projects under the Russian Steel Industry Development Strategy to 2020. It is being implemented as part of the program to set up the Vorsino Industrial Park in the north of the Kaluga region. The project is aimed at: reducing energy consumption; decreasing environmental footprint; and improving the quality of long products. The plant startup is scheduled in three stages. During the first and second stages in 2012, EAF and rolling complexes will be put in operation, with an output of up to 1 mtpy of liquid steel, as well as long products and profiles. The decision on further development of production facilities will be considered in 2012. It will involve product mix expansion and total output increase up to 1.55 mtpy of rolled products. The main Kaluga Mini-Mill facilities – the EAF Shop and Rolling Shop - are currently under construction (the total design construction cost for stages one and two is c.RUR30 billion) With the plant go-live, a total of over 1250 employees with competitive salaries and social benefits will be involved in production and support activities. The new Kaluga Mini-Mill will further boost NLMK’s competitive edge.