MECHEL REPORTS FINANCIAL RESULTS FOR 2008 FULL YEAR PERIOD

— Revenues increased 48.9% to $9.95 billion —
— Operating income increased 82.9% to $2.6 billion —
— Net income increased 24.9% to $1.1 billion, or $2.74 per ADR /diluted share —

Igor Zyuzin, Mechel’s Chief Executive Officer, commented on the full year results: “Overall, despite crisis developments in the world economy the fourth quarter, the year of 2008 was a successful one. Once again we managed to achieve record figures in revenue, operating income, and net profit, which allowed us to obtain a certain degree of security before market conditions for Mechel’s products changed for the worse. Moreover, even during the most challenging fourth quarter on operating level, not taking into consideration inventory provision, Mechel’s subsidiaries generated profit.

Throughout the year we also continued to develop the company by M&A transactions, strengthening vertical integration and laying solid base for the company’s growth in the future. As a result of testing on asset impairment there were no goodwill write-offs, which testifies about Mechel’s well balanced and carefully planned approach to M&A transactions.

Unfortunately like many other companies because of significant and sharp decline in market conditions we de-jure breached a number of covenants on our debt obligations. That is why most of our long-term obligations were reclassified as short term ones, which resulted in a significant increase of this position in our balance sheet. Most lending banks show understanding for this situation and take reasonable approach to it. We have already reached agreements on conditions for restructuring the main part of the debt and expect that the restructuring papers will be signed in July.”

Net revenue in 2008 rose by 48.9% to $9.95 billion compared to $6.68 billion in 2007. Operating income rose by 82.9% to $2.6 billion or 25.7% of net revenue, versus operating income of $1.4 billion, or 20.9% of net revenue, in 2007.

For 2008, Mechel reported consolidated net income of $1.14 billion or $2.74 per ADR/ordinary share, an increase of 24.9% over consolidated net income of $913.1 million, or $2.19 per ADR/ordinary share in 2007.

Consolidated EBITDA rose by 23.4% to $2.05 billion in 2008, compared to $1.7 billion in the year ago period. Depreciation, depletion and amortization in 2008 were $463.3 million, an increase of 59.6% over $290.3 in the 2007.