Mechel Announces Launch of Universal Rolling Mill’s First Line at Chelyabinsk Metallurgical Plant

Chelyabinsk, Russia — December 19, 2011 – Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces the launch of the universal rolling mill’s first line — the blooming concaster #5 at Chelyabinsk Metallurgical Plant’s oxygen converter shop.

The blooming concaster #5 with an annual capacity of one million tonnes is due to supply the universal rolling mill with top-quality continuously-cast billets.

The new concaster can produce 200 mm x 200 mm and 300 mm x 360 mm billets from various types of steel, including carbon, structural and alloyed steels, further consolidating Chelyabinsk Metallurgical Plant’s status as Russia’s top producer of specialty steels and alloys.

The concaster #5 is part of a complex which produces rail steel and rail billets. The complex also includes a two-position ladle furnace #4 with an annual capacity of 1.2 million tonnes and a two-chamber vacuum degasser with an annual capacity of 650 thousand tonnes, which are necessary to produce metal of requisite specifications. The out-of-furnace steel processing equipment is due to be commissioned by the end of December 2011. The complex’s construction plans also include environmental protection measures. The complex’s facilities are equipped with a modern circuit water-supply cycle and dust-gas filtering systems.

The estimated funding for the complex, including the blooming concaster #5, the ladle furnace # 4 and the vacuum degasser, totals some 189 million dollars. The equipment was supplied by the Italian-based company Danieli.

“The blooming concaster #5’s production capacity will meet the universal rolling mill’s need for top-quality continuously cast billets. Commissioning the concaster’s facilities ahead of the universal mill’s launch gives us time not only to perfect the technology of producing rail metal and billets, but also to process steel into rails thanks to our cooperation with other producers. These steps aim to prepare us for the main complex’s launch and to speed up Chelyabinsk Metallurgical Plant’s mastering of a new technology,” Mechel-Steel Management Company’s Chief Executive Officer Andrey Deineko explained.

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, ferrochrome, ferrosilicon, steel, rolled products, hardware, heat and electric power. Mechel products are marketed domestically and internationally.