core sector communique

Mechel Announces Launch of Modernized Steelmaking Complex at Otelu Rosu

Moscow, Russia – June 7, 2011 – Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces the launch of an modernized steelmaking complex at its Romanian-based subsidiary Ductil Steel Otelu Rosu. The complex’s launch was attended by Prefect of Caras-Severin Octavian Tunea, Fuchs Technology AG’s President Gerhard Fuchs, Mechel OAO’s Chairman of the Board of Directors Igor Zyuzin, Mechel OAO’s Senior Vice-President Victor Trigubko, Chief Executive Officer of Mechel-Steel Management OOO Andrey Deineko and General Director of Mechel’s management company in Romania Yuri Gushchin. Octavian Tunea, Gerhard Fuchs and Igor Zyuzin pressed the launch button for the reconstructed steelmaking complex, which includes a new electric arc furnace with the COSS system, an upgraded continuous billets caster, and a modern scrap metal preparation section. The reconstruction’s key aggregate is the electric arc furnace with the COSS system developed by the German-based company Fuchs Technology. The new machine operates on the basis of an innovative technique — using heat from waste gases for preheating scrap metal, enabling the plant to significantly cut expenses (on raw materials and power) and improve the quality of steel. COSS equipment in Otelu Rosu will be the third such to be implemented in the world and the first such in Europe. The COSS-equipped furnace has the production capacity of some 810,000 tonnes of steel a year. Investment in the plant’s modernization program amounted to 48.7 million dollars. “Completion of the investment project at the Otelu Rosu plant will enable us to fully provide Mechel’s Romanian enterprises with raw materials, which will dramatically cut costs and improve the efficiency of their work. Without doubt, this project is symbolic not only for the company’s development. Launch of innovative and high-technology projects in Romania is a positive signal for its economy and confirmation that joint efforts by the government and business to overcome the crisis’s consequences are effective,” Mechel OAO’s Chairman of the Board of Directors Igor Zyuzin noted. Mechel is one of the leading Russian companies. Its business includes four segments: mining, steel, ferroalloy and power. Mechel unites producers of coal, iron ore concentrate, nickel, steel, ferrochrome, ferrosilicon, rolled products, hardware, heat and electric power. Mechel products are marketed domestically and internationally.