Evraz rail mill sidetracked by dispute

In July 2021, the Evraz North America business unit of Russia-based global steel producer Evraz broke ground on a $500 million capital project at its steel rail production facility in Pueblo, Colorado. In the subsequent 18 months, not everything has gone to plan with the project.

After Russia invaded Ukraine in February of last year, the value of Evraz stock (listed on the London Stock Exchange) began falling, and governments in which Evraz does business began scrutinizing the firm’s operations for national security reasons.

As 2023 gets underway, Evraz North America finds itself involved in a standoff with the general contractor managing the construction project, according to regional media reports.

A January report from Colorado Public Radio says Evraz has filed a complaint against North Dakota-based Wanzek Construction, saying the contractor has not met some of its commitments and caused $130 million in damages.

Wanzek Construction has filed a counterclaim, according to the report, saying Evraz has not fulfilled its obligations and has made it “impossible to get the work done.” The contractor also says the project likely now will cost $600 million.

An Evraz spokesperson says the steelmaker is seeking a new general contractor to complete the project. “We look forward to retaining many of the project’s current subcontractors as we work to complete the project,” Evraz Senior Vice President David Ferryman says in the report. “We’re confident these changes will help us to successfully complete the rail mill project [and we are] committed to the growth, longevity and ongoing success of our operations in Pueblo.”

Evraz North America says, “The equivalent of more than a million cars a year are melted in our electric arc furnace (EAF)” in Pueblo.