MOSCOW, September 09. /ITAR-TASS/ Moscow government-controlled metallurgical machine-building design and research institute VNIIMETMASH has sent a proposal to Iran to build a rail and structural steel mill near the city of Isfahan, with a capacity of up to 600,000 tonnes annually, a representative for the company said Tuesday.

According to VTB Capital analyst Vadim Astapovich, construction of the facility may cost US $400 million-$500 million.

An existing smelter in the city earlier planned to organize rail production and launch it by August 2015. If the Russian proposal is accepted and a contract is signed, the smelter will become the first rail producer in the Middle East after the deal is signed.

In August, Russian Railways and Iranian Railways signed a memorandum of understanding to speed up implementation of railway projects in the country.