core sector communique

Mechel Reports Completion of First Stage of Reconstruction of Oxygen Converter Shop in Chelyabinsk Metallurgical Plant

Chelyabinsk, Russia – August 23, 2011 – Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces the launch of the new converter # 2 in Chelyabinsk Metallurgical Plant’s oxygen-converter shop. Replacement of the converter #2 is the first stage in the complex reconstruction program for Chelyabinsk Metallurgical Plant’s oxygen converter shop. The program, which is due to be completed by 2013, includes full replacement of the shop’s three converters, dedusting tracts and their infrastructure equipment. Once the program is completed, the shop’s steel annual output will go up by 950,000 tonnes to a total of 4,550,000 tonnes. Its total cost is estimated at 173.8 million US dollars (5.1 billion rubles*). The new converter #2’s launch will enable the company to increase cast weight from 140 to 152 tonnes and cut down on the time required for cast treatment. The converter was produced by Austrian-based Siemens VAI, with the cooler, the dedusting system and the stack module manufactured by the Ukrainian-based technological and scientific center Energostal. The converter #2 is also equipped with a modern dedusting system which ensures maximum filtering and allows the plant to reduce emission of waste gases into the atmosphere. Reconstruction of the converter # 2 cost a total of 1.289 billion rubles (44.1 million US dollars*). Today the oxygen-converter shop includes three converters and two high-capacity concasters (CCMs). The plant’s complex technical re-equipment program also includes construction of a ladle furnace, a vacuum degasser and the concaster #5, which will produce billets for Chelyabinsk Metallurgical Plant’s major investment project — the universal rolling mill. * According to the Russian Central Bank exchange rate of 29.2555 RUR/$ as of August 23, 2011. 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.