EXHIBT 10.2

                    SEPARATION AGREEMENT AND GENERAL RELEASE

         THIS SEPARATION AGREEMENT AND GENERAL RELEASE (the "Agreement") is
entered into by Joe E. Corvin (hereinafter referred to as "Corvin") and Oregon
Steel Mills, Inc. and its subsidiaries (hereinafter referred to as "OSM").

                                    RECITALS

         A. Corvin has been employed by OSM and his duties as President and CEO
and Director ended effective July 31, 2003, by mutual agreement.

         B. Corvin and OSM wish to enter into an agreement to clarify and
resolve any disputes that may exist between them arising out of the employment
relationship and any cessation of duties, and any continuing obligations of the
parties to one another.

         C. OSM has advised Corvin of his right to consult an attorney prior to
signing this Agreement and has provided him reasonable time to consider its
offer and to seek legal assistance. The parties have consulted attorneys of
their choice and each understands that he or it is waiving all potential claims
against the other party, except as specifically reserved herein.

         D. This Agreement is not and should not be construed as an admission or
statement by either party that it or any other party has acted wrongfully or
unlawfully. Both parties expressly deny any wrongful or unlawful action.

                                   AGREEMENTS

         NOW, THEREFORE, in consideration of the following recitals and the
mutual promises contained below, it is agreed as follows:

1.       EMPLOYMENT:  ENDING DATE AND RESPONSIBILITIES

         Corvin's current employment as an officer and director of OSM ended
effective July 31, 2003. On August 1, 2003, Corvin will be on a paid
administrative leave through the earlier of April 6, 2006 or until Corvin
becomes employed on a full-time basis with another employer (the "Paid Leave
Period"). If this Agreement is rescinded in accordance with Section 6, Corvin's
employment with OSM will terminate effective July 31, 2003.

         Subject to Section 4, the parties agree that Corvin's acceptance of or
engaging in short-term consulting assignments with other entities shall not be
deemed full-time employment with another employer for purposes of his
entitlement to paid leave, provided that the duration of any such assignment or
engagement for any single entity does not exceed in the aggregate ninety (90)
days. Within ten days after accepting any part-time employment, consulting
engagement, engagement as an independent

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contractor, partnership or other association, Corvin will advise OSM of the
identity of the new employer, client, partner or other person with whom Corvin
is associated.

         Effective July 31, 2003, Corvin resigns as an officer and director of
OSM (and each of its subsidiaries) and from all other positions, titles, duties,
authorities and responsibilities with OSM and its affiliates. Corvin agrees to
execute all documents that are reasonably necessary to implement such
resignations.

2.       PAID LEAVE AND BENEFITS

         Starting August 1, 2003 and through the Paid Leave Period,

         (a) OSM will pay Corvin an annual total amount of $550,000.00 in equal
semi-monthly payments, less required and authorized withholding, in accordance
with the normal payroll practices of OSM.

         (b) OSM will provide Corvin with outplacement services for up to six
(6) months should he desire the service.

         (c) Corvin will be considered an employee eligible to participate in
OSM's health and welfare (medical, dental and life insurance) benefits programs,
as in effect from time to time during the Paid Leave Period, subject to
eligibility under the applicable plan, payroll deductions of any applicable
employee cost sharing, and other requirements. If, OSM reasonably determines
that Corvin cannot participate in OSM's welfare benefit plans, then, in lieu of
providing benefits under such plans OSM will provide comparable benefits or the
cash equivalent of the cost of obtaining comparable benefits to Corvin. Any
dispute about the cost or comparability shall be resolved in accordance with
Section 13.

         (d) Corvin will not be eligible to participate or receive any benefits
(including pro rata amounts) in any bonus, AIP, stock option, or other type of
bonus programs of OSM, including without limitation, for 2003 and going forward.

         (e) No accrued vacation will be paid out and no additional vacation or
sick leave time will accrue.

         (f) All options currently held by Corvin will continue to vest and be
exercisable as if Corvin is an employee in accordance with the applicable plan.

         (g) Corvin's benefits under OSM's retirement plans and supplemental
retirement plans shall be calculated deeming the Paid Leave Period to constitute
credited service and treating the benefits payable under Section 2(a) as
"Covered Compensation," for all purposes under such retirement plans.

         (h) Corvin will not participate as an employee in any future ESOP
contributions.

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         (i) Corvin will not be eligible to defer wages, take out loans or
receive OSM matching contributions under the Thrift Plan.

         (j) At the end of the Paid Leave Period, Corvin will be eligible to
participate in the retiree medical benefits at the level presently in effect, or
at the level in effect at the end of Paid Leave Period, whichever is greater. At
this time, the retiree medical benefits include a monthly payment of $55.00 to
each of Corvin and his spouse upon reaching the age of 65 to assist with the
cost of Medicare supplement coverage.

         (k) At the conclusion of the Paid Leave Period, Corvin may exercise his
rights to continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act (COBRA) for the statutory period.

         (l) The Indemnification Agreement dated January 18, 2002 between Corvin
and OSM will continue. Nothing herein shall affect any right Corvin may have to
indemnification for acts as an officer of OSM available to him under Delaware
law, OSM's Bylaws, and/or liability coverage for directors and officers to the
extent that coverage was in place at the time this Agreement is signed. To the
extent permitted by law, Corvin shall be entitled to the fullest extent of such
indemnity for all acts done at the request of and on behalf of OSM during the
Paid Leave Period.

         OSM acknowledges that Corvin was authorized to sign the January 18,
2002 Indemnification Agreement on behalf of OSM as well as on his own behalf,
and agrees that nothing in that Agreement requires Corvin to hold the status of
employee, officer or agent to obtain the benefit of any indemnification during
the term of the Paid Leave Period.

         (m) OSM shall pay Corvin's reasonable actual attorney's fees incurred
for the review and/or negotiation of this Agreement; this amount shall be
considered an expense to OSM.

         (n) OSM shall pay all premiums to maintain life insurance coverage in
the face amount of $250,000.00 presently in effect through the end of the Paid
Leave Period.

         These benefits supersede and replace any and all benefits to which
Corvin might otherwise be or become entitled under OSM's compensation and
employee benefit plans (including severance plans, change in control and other
arrangements), other than rights vested as of July 31, 2003. Specifically, the
change in control letter dated July 31, 2000 between Corvin and OSM is
terminated. All payments and benefits payable under this Agreement will be paid
subject to all required tax withholdings. Except for vested benefits and retiree
medical benefits to Corvin's spouse, these benefits will stop upon the death of
Corvin.

3.       VALID CONSIDERATION

         Corvin and OSM agree that the payments to Corvin described in the
preceding section include payments that are not required by OSM policies or
procedures or by any

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other contractual obligation of OSM, and are offered by OSM solely as
consideration for this Agreement. Corvin acknowledges that these payments
represent a substantial benefit to him.

4.       CONFIDENTIALITY; NONCOMPETITION

         (a) Corvin acknowledges that during the course of his relationship with
OSM he has learned or developed Proprietary Information (as defined below).
Corvin further acknowledges that unauthorized disclosure or use of such
Proprietary Information will cause OSM and its affiliates irreparable harm.
Except as otherwise provided in this Agreement, Corvin agrees that he will not,
directly or indirectly, disclose, disseminate, publicize, communicate or cause
or permit to be disclosed, disseminated, publicized or communicated or used on
his behalf or another's behalf any Proprietary Information. If Corvin has any
questions about whether particular information is Proprietary Information he
shall consult with OSM's President.

         (b) "Proprietary Information" means trade secrets (such as customer
information, technical and non-technical data, a formula, pattern, compilation,
program, device, method, technique, drawing, process, etc.) and other
confidential and proprietary information concerning the products, processes, or
services of OSM and its affiliates, including, but not limited to: unpatented or
unpatentable inventions, discoveries or improvements; computer programs;
marketing, manufacturing, or organizational plans; research and development
results and plans; business and strategic plans; sales forecasts and plans;
personnel information, including the identity of other employees of OSM and its
affiliates, their responsibilities, competence, abilities, and compensation;
pricing, cost and financial information; current and prospective customer lists
and information on customers or their employees; information concerning
purchases of major equipment or property; and information about potential
transactions or activities which information (i) has not been made known
generally to the public and is useful or of value to the current or anticipated
business, or research or development activities of OSM or any customer or
supplier of OSM, or (ii) has been identified to Corvin as confidential by OSM,
either orally or in writing.

         (c) Until the end of the Paid Leave Period, Corvin will not, without
the prior written consent of OSM which consent may be withheld at OSM's
discretion, directly or indirectly, engage or invest in, own, manage, operate,
finance, control or participate in the ownership, management, operation,
financing or control of, consult with, be employed by, associated with or in any
manner connected with, lend Corvin's name or any similar name to, lend Corvin's
credit to, or render services or advice or other aid to, or guarantee any
obligation of, in each case, with any person or entity engaged in or planning to
become engaged in the business of manufacturing, selling or distributing steel
products or any other business whose products or activities compete in whole or
in part with the business engaged in by OSM or its affiliates prior to the date
of this Agreement or hereafter, anywhere in the United States or Canada.
However, Corvin may purchase or otherwise acquire up to (but not more than) one
percent of any class of securities of any enterprise (but without otherwise
participating in the activities of such enterprise) if such securities are
listed on any national or regional securities

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exchanges or have been registered under Section 12(g) of the Securities Exchange
Act of 1934. In the event of a breach by Corvin of this covenant, the term of
such covenant will be extended by the period of the duration of such breach. The
parties agree that this covenant is reasonable with respect to duration,
geographical area and scope.

         (d) Corvin and OSM acknowledge and agree that damages for breach of the
covenants contained in this Section 4 would be difficult to determine and
therefore these provisions may be enforced by temporary or permanent injunction
to prevent violation in addition to any other remedies available at law or in
equity. However, if any court of competent jurisdiction determines that any
provision within this Section is unreasonable in any respect, the parties intend
that this Section should be enforced to the fullest extent allowed by such
court.

         (e) For the period during which this Agreement has not been publicly
disclosed by OSM in required government filings, OSM and Corvin agree to keep in
confidence all information concerning this Agreement, except (i) to the extent
disclosure is or may be required by statute, by a court of law, by any
governmental agency having supervisory authority over the business of OSM or by
an administrative or legislative body (including a committee) with apparent
jurisdiction to order either of them to divulge, disclose or make accessible
such information, (ii) to the extent disclosure to legal counsel, financial
advisors, and auditors is reasonably necessary; and (iii) to members of Corvin's
immediate family and to those persons within OSM, who, as reasonably determined
by OSM, must know about it in carrying out their duties.

5.       GENERAL RELEASE OF CLAIMS

         (a) In exchange for this Agreement, Corvin (on behalf of himself and
anyone claiming through or on behalf of him) expressly waives any legal rights
and releases, acquits and forever discharges OSM (including its past, present
and future officers, directors, stockholders, managers, agents and
representatives) from any and all liability, demands, claims, lawsuits, actions,
charges, damages, judgments, levies or executions, whether known or unknown,
liquidated, fixed, contingent, direct or indirect, which have been, could have
been or could be raised against any of them in any way connected with Corvin's
service or employment and/or the change of status, separation or termination of
his employment with OSM to the maximum extent permitted by law; PROVIDED THAT,
this waiver and release does not waive or release claims for Corvin's vested
retirement benefits or other vested benefits. It is understood that this release
includes, but is not limited to, any claims for wages, bonuses, employment
benefits, or damages of any kind whatsoever, arising out of any contracts,
express or implied, any covenant of good faith and fair dealing, express or
implied, any torts, any theory of wrongful discharge, any legal restriction on
OSM's right to terminate or change employment, or any federal, state or other
governmental statute or ordinance, including without limitation, Title VII of
the Civil Rights Act of 1964, the Post Civil War Rights Act (42 U.S.C. Sections
1981-88), the Age Discrimination in Employment Act of 1967 (29 U.S.C. Sections
621 et seq), the Rehabilitation Act of 1973, the Equal Pay Act of 1963,
Executive Order 11246, Federal Fair Labor Standards Act, The Employee Retirement
Income Security Act of 1974, the Americans with Disabilities Act of 1990, the
Family

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and Medical Leave Act, workers compensation discrimination, whistleblower laws,
or any other legal limitation on the employment relationship. Notwithstanding
anything herein, Corvin shall retain all rights to enforce this Agreement
according to its terms.

         Corvin represents that he has not filed any complaints, charges or
lawsuits against OSM with any governmental agency or any court, and agrees that
he will not initiate or encourage any such actions.

         (b) In exchange for this Agreement, OSM waives any legal rights and
releases, acquits and forever discharges Corvin from any and all liability,
demands, claims, lawsuits, actions, charges, damages, judgments, levies, or
executions, whether known or unknown, liquidated, fixed, contingent, direct or
indirect, which have been, could have been or could be raised against Corvin in
any way connected with Corvin's service or employment and/or the change of
status, separation or termination of his employment with OSM to the maximum
extent permitted by law. This release shall not apply to any obligation of
Corvin pursuant to this Agreement, any rights that OSM or any affiliate has as a
result of any act or failure to act for which both Corvin and OSM or such
affiliate are jointly responsible; or any obligations of Corvin to OSM and its
affiliates relating to extensions of credit provided by OSM and its affiliates
to Corvin.

         OSM represents that it has not filed any complaints, charges, lawsuits,
or claims against Corvin with any governmental agency or any court and agrees
that it will not initiate or encourage any such actions.

         (c) Corvin and OSM retain all rights to enforce this Agreement in
accordance with its terms.

6.       REVOCATION PERIOD

         By signing this Agreement, Corvin represents that he has had the option
of twenty one (21) days to consider this Agreement and that he has voluntarily
chosen to sign the Agreement prior to the conclusion of the 21-day period.
Further, Corvin understands he may rescind this Agreement within seven (7) days
of executing this Agreement by notifying OSM of his desire to rescind his
consent to the terms of the Agreement.

7.       MUTUAL NONDISPARAGEMENT

         (a) Corvin agrees that, unless required by law, he will not make
disparaging or derogatory statements about OSM, its officers, directors,
stockholders, managers, employees and/or agents or engage in conduct detrimental
to OSM's business or reputation.

         (b) OSM agrees that, unless required by law, it will not make
disparaging or derogatory statements about Corvin or his employment with OSM or
engage in conduct detrimental to his reputation.

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         (c) Corvin and OSM acknowledge and agree that each shall be entitled to
enforce specifically the covenants in this Section 7 by seeking an injunction to
prevent violation in addition to any other remedies available at law or in
equity.

8.       SEVERABILITY

         Whenever possible each provision and term of this Agreement will be
interpreted in a manner to be effective and valid but if any provision or term
of this Agreement is held to be prohibited by or invalid, then such provision or
term will be ineffective only to the extent of such prohibition or invalidity,
without invalidating or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this Agreement. The
parties further agree to replace any prohibited, invalid or unenforceable
provision of this Agreement with a legal, valid and enforceable provision that
will achieve, to the extent possible, the economic, business and other purposes
of such prohibited, invalid or unenforceable provision. If any covenants set
forth in Section 4(c) of this Agreement are held to be unreasonable, arbitrary
or against public policy, such covenants will be considered divisible with
respect to scope, time and geographic area, and in such lesser scope, time and
geographic area, will be effective, binding and enforceable against Corvin.

9.       GOVERNING LAW

         This Agreement will be interpreted, construed, and enforced in
accordance with the laws of the State of Oregon.

10.      ASSIGNABILITY

         No rights or obligations of Corvin under this Agreement may be assigned
or transferred by Corvin and will not inure to the benefit of his heirs. This
Agreement will inure to the benefit of, and be binding upon, any corporate or
other successor or assignee of OSM which acquires, directly or indirectly, by
merger, consolidation or purchase, or otherwise, all or substantially all of the
business or assets of OSM. OSM agrees to require any such successor, by an
agreement in form and substance reasonably satisfactory to Corvin, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent as OSM would be required to perform if no such succession had taken
place.

11.      COMPLETE AGREEMENT

         Except as noted in this Agreement and except for the terms and
provisions of any other employee benefit or other compensation plan (or any
agreement or awards thereunder) referred to in this Agreement, this Agreement
constitutes the entire agreement and understanding between the parties
concerning the subject matter specifically addressed in this Agreement. The
terms of this Agreement are contractual and not merely recital. The terms of
this Agreement may be changed, modified or discharged only by an instrument in
writing signed by both parties. A failure of any

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party to insist on strict performance with any provision of this Agreement shall
not be deemed a waiver of such provision or any other provision of this
Agreement.

12.      FUTURE COOPERATION

         At the request of OSM, Corvin will cooperate with and assist OSM and
its affiliates and provide information to OSM as to matters in which Corvin was
involved, including any information needed in connection with any claim,
litigation or regulatory investigation, by or against OSM, and will testify as a
witness in connection with such matters if requested by OSM to do so. OSM shall
use its best efforts to ensure that any such requests do not interfere with any
part-time employment or consulting in which Corvin is engaged or other personal
activities and shall, to the fullest extent possible, limit its request to
activities that can be carried out in Portland, Oregon. Reasonable and necessary
expenses incurred by Corvin in connection with such cooperation will be
reimbursed by OSM to the extent agreed upon in advance.

13.      DISPUTE RESOLUTION

         (a) Except for equitable relief that may be sought under Sections 4 and
7 of this Agreement, any dispute between the parties concerning the
interpretation, application, or claimed breach of this Agreement will be
submitted to binding, confidential arbitration in Portland, Oregon. Such
arbitration shall be conducted pursuant to the rules of the Arbitration Service
of Portland, or such other service or arbitrator mutually agreed upon by the
parties. Prior to submitting the matter to arbitration, the parties shall first
attempt to resolve the dispute by the claimant notifying the other party in
writing of the claim, by giving the other party the opportunity to respond in
writing within ten (10) days of delivery of the claim, and providing a
reasonable opportunity to meet and confer. If the matter is not resolved in this
manner, the dispute may then proceed to arbitration at the request of either
party. The parties shall bear equally the arbitrator's fees and expenses, as
well as the administrative costs, if any, assessed by the arbitration service or
association. The prevailing party in any such proceedings shall be entitled to
recover costs, expenses, and attorney's fees incurred as a result of such
arbitration or as awarded by the arbitrator. Reasonable discovery in accordance
with the Oregon Rules of Civil Procedures shall be permitted, but either party
may petition the arbitrator to limit the scope of such discovery, in which event
the arbitrator will determine the extent of discovery allowable in connection
with the dispute in question. The parties shall use their reasonable best
efforts to ensure that all disputes are resolved in a timely fashion through
arbitration including without limitation that any arbitration hearing or
proceeding be scheduled within one hundred and eighty (180) days of the making
of a claim, unless a more expeditious time limitation is contemplated by this
Agreement. The award of the arbitrator will be final and binding, and judgment
upon an award may be entered in any court of competent jurisdiction. The
arbitrator will have authority to award any remedy that a court in the State of
Oregon could order or grant, including but not limited to injunctive relief and
other equitable relief and the imposition of sanctions for abuse or frustration
of the arbitration process, except that the arbitrator will not have authority
to award punitive damages or any other amount for the purpose of imposing a
penalty. The parties will

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keep all information relating to the arbitration and the disposition of each
claim confidential to the fullest extent permitted by applicable law.


         (b) If Corvin materially breaches either Section 4 or 7, Corvin will
immediately cease to have any rights to: (i) any payments under Section 2(a) or
(b); (ii) the benefits to be provided or paid to Corvin, as the case may be,
under Section 2(c) (except with respect to COBRA continuation coverage); (iii)
the options not vested under Section 2(f) shall immediately terminate and be
canceled; and (iv) the benefits to be provided or paid to Corvin, as the case
may be, under Sections 2(g), 2(j) and 2(n). However, at least ten (10) days
prior to any such cessation, there shall be delivered to Corvin a written notice
from OSM of its intent to cease payment or provision of such benefits
accompanied by a written statement setting forth in reasonable detail the
grounds for such cessation, together with a notice of arbitration. The
arbitrator will hold a hearing, at which the parties may present evidence and
argument, within thirty (30) days of his or her appointment, and will issue an
award within fifteen (15) days of the close of the hearing. If the arbitrator
concludes there was no material breach, OSM shall forthwith discharge all
payment arrears together with interest accrued from the date the payment was
ceased, payable at the legal rate and reinstate the other benefits.

14.      KNOWING AND VOLUNTARY AGREEMENT

         Corvin represents and agrees that he has read this Agreement and that
it is written in a manner calculated to be understood by him, understands its
terms and the fact that it releases any claim he might have not expressly
reserved against OSM and its agents, understands that he has the right to
consult counsel of choice and has either done so or knowingly waived the right
to do so, and enters into this Agreement without duress or coercion from any
source.

15.      COUNTERPART

         This Agreement may be executed in separate counterparts, each of which
is deemed to be an original and all of which taken together constitute one and
the same agreement.

16.      CONSTRUCTION

         The parties acknowledge and agree that each party has reviewed and
negotiated the terms and provisions of this Agreement and has had the
opportunity to contribute to its revision. Accordingly, the rule of construction
to the effect that ambiguities are resolved against the drafting party shall not
be employed in the interpretation of this Agreement. Rather, the terms of this
Agreement shall be construed fairly as to both parties and not in favor or
against either party.

17.      NOTICES

                  All notices, requests, demands or other communications under
this Agreement must be (a) in writing; (b) delivered to the parties at the
addresses set forth

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below, or any other address that a party may designate by notice to the other
party; and (c) are considered delivered: (1) upon actual receipt if delivered
personally or by an overnight delivery service; and (2) at the end of the third
business day after the date of deposit in the United States mail, postage
pre-paid, certified, return receipt requested.


             To OSM:                                        To Corvin:

             Oregon Steel Mills, Inc.                       Joe E. Corvin
             1000 SW Broadway, Suite 2200                   33421 Watson Road
             Portland OR 97205                              Scappoose, OR 97056

             Attn:  President



         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
dates indicated below:

Oregon Steel Mills, Inc.

/s/ William Swindells                       /s/ Joe E. Corvin
---------------------------                 -------------------
Name: William Swindells                     Joe E. Corvin
      ---------------------
Title Chairman
      ---------------------

Dated:    September 10, 2003                Dated: September 16, 2003
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