EXHIBIT 10.1

                               OREGON STEEL MILLS
                              EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of the
1st day of August, 2003, by and between OREGON STEEL MILLS, INC., a Delaware
corporation ("OSM") and JAMES E. DECLUSIN (the "Executive").

                                    RECITALS

A.       OSM desires to employ Executive as President and Chief Executive
         Officer and Executive desires to be so employed; and

B.       OSM and Executive desire to set forth in writing the terms of their
         agreement with respect to Executive's employment;

NOW THEREFORE, in consideration of the premises and the mutual agreements
contained in this Agreement, the parties agree as follows:

1. TERM OF EMPLOYMENT.

   (a) OSM employs Executive, and Executive accepts employment with OSM, in the
positions and with the duties and responsibilities as set forth in Section 2
below for the Term of Employment, subject to the terms and conditions of this
Agreement.

   (b) The Term of Employment under this Agreement will include the Initial Term
and each Renewal Term. The Initial Term will commence as of August 1, 2003 and
will continue until December 31, 2005. The Term of Employment will automatically
renew for a one-year period (each such renewal, a "Renewal Term") at the end of
the Initial Term and each Renewal Term, unless either party gives notice to the
other not less than six months prior to the end of the Initial Term or any
Renewal Term, as the case may be, of his or its intent not to renew such Initial
Term or Renewal Term, as the case may be.

2. POSITION; DUTIES AND RESPONSIBILITIES. During the Term of Employment:

   (a) Executive will be employed as President and Chief Executive Officer of
OSM, reporting directly to the Board of Directors of OSM (the "Board of
Directors"), with such duties and day-to-day management responsibilities as are
customarily performed by persons holding such offices at similarly situated
steel companies and such other duties as may be mutually agreed upon between
Executive and the Board of Directors.

   (b) Executive will, without additional compensation, also (i) serve on the
Board of Directors of OSM; and (ii) serve on the board of directors or
management committees of, serve as an officer of, and/or perform such executive
and consulting services for, or on behalf of, such subsidiaries or affiliates of
OSM as the Board of Directors may, from time to time, request. OSM and such
subsidiaries and affiliates are referred to, collectively, as the "Company."

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   (c) Executive will serve OSM faithfully, diligently and to the best of his
ability and will devote substantially all of his time and efforts to his
employment and the performance of his duties under this Agreement. Nothing in
this Agreement will preclude Executive from engaging in charitable and community
affairs and managing his personal financial and legal affairs, so long as such
activities do not materially interfere with his carrying out his duties and
responsibilities under this Agreement.

   (d) The employment relationship of Executive will also be governed by the
general employment policies and practices of the Company reasonably adopted from
time to time, except to the extent inconsistent and in conflict with the terms
of this Agreement. Executive agrees to execute and comply with the Company's
standard form of Confidentiality Agreement.

3. COMPENSATION. During the Term of Employment:

   (a) BASE SALARY. OSM will pay Executive an annual base salary (the "Base
Salary") equal to $500,000, payable to Executive in semi-monthly equal payments
on regular OSM paydays. All payments and benefits payable under this Agreement
will be paid subject to all required tax withholdings.

   (b) ANNUAL INCENTIVE PLAN. Executive will be eligible to participate in the
existing annual incentive plan ("AIP") with a target bonus initially set at 50%,
subject to further review and modification by the Compensation Committee. The
AIP and its goals may be modified and established by the Compensation Committee
from time to time. If OSM adopts new annual incentive bonus plans or programs or
new equity-based incentive compensation plans or programs, Executive will be
eligible to participate in such plans or programs.

   (c) OTHER INCENTIVE PROGRAMS. Executive will be eligible to receive such
stock options, restricted stock, other grants or bonuses as the Compensation
Committee of the Board of Directors or the Board of Directors, as the case may
be, will deem appropriate.

   (d) RESTRICTED STOCK. As a material inducement to Executive, Executive will
be granted forty thousand (40,000) restricted shares of common stock of OSM,
20,000 shares of which will vest as of the date of this Agreement and 20,000
shares of which will vest on August 1, 2004. If Executive is not employed by the
Company on August 1, 2004, the unvested shares will be forfeited.

4. BENEFITS. During the Term of Employment:

   (a) VACATION AND OTHER PAID TIME OFF. Executive will be entitled vacation and
paid time off in accordance with OSM's policies for officers.

   (b) BENEFIT PLANS. Executive will be entitled to participate in OSM's benefit
plans for executives, including without limitation, OSM's retirement and
supplemental retirement plans, ESOP, health and welfare (medical, dental, life
and disability insurance) insurance programs, 401(k) plan and other qualified
retirement plans and matching contributions with respect to such plans, in
accordance with their terms (including eligibility, payroll deductions of any
applicable employee cost sharing, and other requirements), each of which may be
amended from time to time, and any other benefit plans now or hereafter
available to OSM's executive officers, in its sole discretion. OSM may
prospectively amend, eliminate or add to these insurance and benefit programs at
any time, in its sole discretion.

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   (c) EXPENSES. OSM will reimburse Executive for any and all necessary,
customary and usual business expenses, properly receipted in accordance with OSM
policies, incurred by Executive in connection with his employment under this
Agreement. In addition, OSM will provide Executive with OSM's standard executive
relocation benefits and other relocation expenses (with final benefits to be
agreed by the Parties in good faith).

   (d) OTHER FRINGE BENEFITS. At the Executive's option, OSM will also provide
Executive with other perquisites customarily provided to a President and Chief
Executive Officer.

   (e) CHANGE IN CONTROL AND INDEMNIFICATION AGREEMENTS. OSM and Executive will
enter into OSM's standard forms of change in control letter for executives and
Indemnification Agreement for executives, each modified as necessary to be
consistent with or to accommodate this Agreement.

5. TERMINATION OF EMPLOYMENT.

   (a) TERMINATION DUE TO DEATH OR DISABILITY. If Executive's employment is
terminated during the Term of Employment by reason of Executive's death or
Disability, Executive's Term of Employment will terminate automatically without
further obligations to Executive, his legal representative or his estate, as the
case may be, under this Agreement except for (i) any compensation earned but not
yet paid, including and without limitation, any amount of Base Salary accrued or
earned but unpaid and any other payments payable to Executive pursuant to
Section 5(e) below, which amounts will be promptly paid in a lump sum to
Executive, his legal representative or his estate, as the case may be, (ii)
continued payment on a monthly basis of Executive's then current Base Salary, as
calculated pursuant to Section 3(a) above, for the remainder of the Term of
Employment, which will be paid to Executive, his legal representative or his
estate, as the case may be; and (iii) any benefits provided for in the event of
death or Disability under OSM's disability insurance plans, life insurance and
other benefit plans for executives.

   (b) TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. In the event Executive's
employment is terminated by OSM without Cause (including OSM's giving notice of
its determination not to renew the Initial Term or any Renewal Term pursuant to
Section 1(b)) or by Executive for Good Reason, unless any such termination is
preceded by Executive's giving notice of his determination not to renew the
Initial Term or any Renewal Term pursuant to Section 1(b), Executive will be
entitled to the same payments and benefits provided for in Sections 4 and 5 of
this Agreement until the expiration of the Term of Employment.

   (c) TERMINATION BY OSM FOR CAUSE OR VOLUNTARY TERMINATION BY EXECUTIVE. In
the event Executive's employment is terminated by OSM for Cause, or is
terminated by Executive on his own initiative for other than a Good Reason
(including pursuant to Section 1(b)), Executive will be entitled to any
compensation earned but not yet paid, including and without limitation, any
amount of Base Salary accrued or earned but unpaid and any other payments
payable to Executive pursuant to Section 5(e) below, as of the date of
termination.

   (d) TERMINATION RELATED TO CHANGE IN CONTROL. Termination related to Change
in Control will be governed by the Change in Control Agreement entered into in
accordance with Section 4(e).

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   (e) OTHER PAYMENTS. Upon the termination of Executive's employment, in
addition to the amounts payable under any Section above, Executive will be
entitled to receive the following: (i) any annual bonus earned during one or
more preceding years but not paid; (ii) reimbursement for reasonable business
expenses incurred but not yet reimbursed by OSM; and (iii) any other vested
benefits to which Executive or his legal representative may be entitled under
applicable plans and programs of OSM.

   (f) NO MITIGATION; NO OFFSET. In the event of any termination of Executive's
employment under this Agreement, he will be under no obligation to seek other
employment or otherwise in any way to mitigate the amount of any payment
provided for in this Section 5, and there will be no offset against amounts due
him under this Agreement on account of any remuneration attributable to any
subsequent employment that he may obtain.

6.  DEFINITIONS.  For purposes of this Agreement, the following terms will be
defined as set forth below:

   (a) CAUSE. "Cause" means any act or omission that is: a breach of Executive's
obligations to the Company, including but not limited to substantial absence
without cause, serious breach of confidence, criminal offenses committed at the
place of work or outside of it, personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule, or
regulation (other than traffic violations or similar offenses). OSM may
terminate this Agreement effective as of the date a written Notice of
Termination is given specifying the cause.

   (b) DISABILITY. "Disability" means a physical or mental condition which
renders Executive unable or incompetent to carry out the essential functions of
the job which Executive was assigned at the time the disability was incurred,
which has lasted for at least 120 consecutive days, and which in the opinion of
a physician mutually agreed upon by the Company and Executive (provided that
neither party will unreasonably withhold agreement) is expected to last for an
indefinite duration or a duration in excess of six months.

   (c) GOOD REASON. "Good Reason" means: (i) material diminution in Executive's
title, duties or responsibilities; (ii) relocation of Executive's place of
employment without his consent to an area other than a 50 mile radius from
Portland, Oregon; or (iii) the failure by OSM to comply with the provisions of
this Agreement, other than an isolated, insubstantial and inadvertent failure
not taken in bad faith and which is remedied by the Company promptly after
receipt of notice given by Executive.

7. NONCOMPETITION. During the Term of Employment and for a period of one year
following any voluntary termination by Executive without Good Reason, Executive
will not, without the prior written consent of OSM which will not be
unreasonably withheld, perform services for any person or entity engaged in the
business of manufacturing, selling or distributing steel products in the United
States or Canada in competition with the Company. Executive agrees that damages
for breach of the covenants contained in this Section would be difficult to
determine and therefore agrees that these provisions may be enforced by
temporary or permanent injunction. The right to such injunctive relief will be
in addition to and not in place of any other remedies to which the Company may
be entitled. Executive agrees that the provisions of this Section are
reasonable. However, if any court of competent jurisdiction determines

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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.

8. ARBITRATION. Any dispute between the parties with respect to any of the
matters set forth in this Agreement will be submitted to binding arbitration in
Portland, Oregon. Either party may commence the arbitration by delivery of a
written notice to the other, describing the issue in dispute and its position
with regard to the issue. If the parties are unable to agree on an arbitrator
within 30 days following delivery of such notice, the arbitrator will be
selected by a Judge of the Circuit Court of the State of Oregon for Multnomah
County upon three days' notice. Discovery will be allowed in connection with any
such arbitration to the same extent permitted by the Oregon Rules of Civil
Procedure 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. Except as
otherwise provided in this Agreement, the arbitration will be conducted in
accordance with the rules of the Arbitration Services of Portland, Inc. then in
effect for expedited proceedings. 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 hold a hearing, at which the parties may
present evidence and argument, within 30 days of his or her appointment, and
will issue an award within 15 days of the close of the hearing. 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 keep all information relating to the arbitration and the
disposition of each claim confidential to the fullest extent permitted by
applicable law. Unless the arbitrator assesses reasonable attorneys' fees and
the cost of the arbitrator to one or both parties, each party will pay its own
attorneys' fees and share the cost of the arbitrator.

9. ASSIGNABILITY; BINDING NATURE. This Agreement will inure to the benefit of
the Company and Executive and their respective successors, heirs (in the case of
Executive) and assigns. The Company may not assigned or transfer its rights and
obligations under this Agreement without the prior written consent of Executive
except to a successor of the Company's business which expressly assumes the
liabilities, obligations and duties of OSM, as contained in this Agreement,
either contractually or as a matter of law. This Agreement will not be
assignable by Executive.

10. REPRESENTATION. OSM represents and warrants that it is fully authorized and
empowered to enter into this Agreement.

11. ENTIRE AGREEMENT. This Agreement, the documents referenced in this Agreement
and the offer letter dated July 31, 2003 from OSM contain the entire agreement
between OSM and Executive concerning the subject matter and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings, whether
written or oral, between them with respect thereto.

12. AMENDMENT; WAIVER. This Agreement cannot be changed, modified or amended
without the consent in writing of both Executive and OSM. No waiver by either
OSM or Executive at any time of any breach by the other party of any condition
or provision of this Agreement will be deemed a waiver of a similar or

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dissimilar condition or provision at the same or at any prior or subsequent
time. Any waiver must be in writing and signed by Executive or an authorized
officer of OSM, as the case may be.

13. SEVERABILITY. In the event that any provision or portion of this Agreement
will be determined to be invalid or unenforceable for any reason, in whole or in
part, the remaining provisions of this Agreement will be unaffected thereby and
will remain in full force and effect to the fullest extent permitted by law.

14. GOVERNING LAW. This Agreement and all rights thereunder, and any
controversies or disputes arising with respect thereto, will be governed by and
construed and interpreted in accordance with the laws of Oregon, applicable to
agreements made and to be performed entirely within such State, without regard
to conflict of laws provisions thereof that would apply the law of any other
jurisdiction.

15. SURVIVAL OF EXECUTIVE'S RIGHTS AND OBLIGATIONS. All of Executive's rights
under this Agreement, including his rights to compensation and benefits, and his
noncompetition obligations under Section 7 and under the Confidentiality
Agreement, will survive the expiration of the Term of Employment, any
termination of Executive's employment and the termination of this Agreement.

16. NOTICES. Any notice given to either party will be in writing and will be
deemed to have been given when delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, duly addressed to
the party concerned, if to OSM, at its principal office, and if to Executive, at
the address of Executive shown on OSM's records or at such other address as such
party may give notice of.

17. HEADINGS. The headings of the sections contained in this Agreement are for
convenience only and will not be deemed to control or affect the meaning or
construction of any provision of this Agreement.

18. COUNTERPARTS. This Agreement may be executed in two or more counterparts.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.



OREGON STEEL MILLS, INC.                             Executive:

/s/ William Swindells                                /s/ James E. Declusin
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William Swindells, Chairman                           James E. Declusin


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