Mechel Reports Opening Ceremony for Quality Steel Producing Complex at Chelyabinsk Metallurgical Plant

Chelyabinsk, Russia — March 01, 2012 – Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, reports that a ceremony was held to launch the first line of Chelyabinsk Metallurgical Plant’s universal rolling mill — a complex producing quality steel. JSC Russian Railways’ President Vladimir Yakunin, Chelyabinsk Region’s Governor Mikhail Yurevich, Chelyabinsk’s City Administration Chief Sergei Davydov and other guests attended the ceremony.

JSC Russian Railways’ President Vladimir Yakunin, Chelyabinsk Region’s Governor Mikhail Yurevich, Russian Industry and Trade Ministry’s Basic Industries Department Director Viktor Semenov, Chelyabinsk Region’s Chief Federal Inspector Artyom Pushkin, Chelyabinsk’s City Administration Chief Sergei Davydov, JSC Russian Railways’ Vice-President for Infrastructure Vladimir Vorobyov and Head of South Urals Railway (JSC Russian Railways’ branch) Viktor Popov visited Chelyabinsk Metallurgical Plant as part of a working trip.

After the ceremony’s official part, Mechel OAO’s Chairman of the Board of Directors Igor Zyuzin, JSC Russian Railways’ President Vladimir Yakunin and Chelyabinsk Region’s Governor Mikhail Yurevich cut the symbolic ribbon and launched the complex producing quality steel which will be used to manufacture rails among other products. It includes blooming concaster # 5 with an annual capacity of 1 million tonnes, two-position ladle-furnace #4 with an annual capacity of 1.2 million tonnes of steel, and a two-chamber vacuum degasser with an annual capacity of 650 thousand tonnes which were launched for hot testing in December 2011. All of the complex’s facilities are equipped with modern environment-friendly technology — a circuit water-supply cycle and dust-gas filtering systems.

The delegation also toured the site for the second line of the long rail production complex — the universal rolling mill itself — to see the progress of the construction, including the reheating furnace, the rolling mill line, the rail treatment area, the rollshop complex and the rail-welding installation which will weld the 100-meter rails into 800-meter strings.

Investment in the entire rail- and beam-producing complex will total some 853.9 million dollars.

JSC Russian Railways’ President Vladimir Yakunin hailed the launch of the quality steel producing complex as a vivid event in the cooperation between Russian Railways and Mechel OAO. “This is a serious step forward toward expanding the partnership of the two companies, the drive to achieve new results not only in business, be it transport or steelmaking, but certainly for the development of the entire Russian economy,” Vladimir Yakunin stressed.

“It is very important for us that the plant is becoming very modern. We are glad that great funds are being invested in Chelyabinsk Region’s development. I am absolutely sure that once the plant’s modernization is fully complete, the plant will be on a par with the world’s leading producers, and we will be getting more jobs and taxes, which is very important,” Chelyabinsk Region’s Governor Mikhail Yurevich noted.

“The quality steel production complex was constructed as part of setting up a new technological production chain of long rails at Chelyabinsk Metallurgical Plant — from making steel to rolling and thermal treatment. The complex’s units will enable the plant to produce high-quality billets for the universal rolling mill, which will have all the qualities required to produce 100-meter rails of high resistance to wear, contact endurance and reliability in low temperatures. These parameters are especially important considering the climatic specifics of rail use in most of Russia’s territory,” 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, ferrochrome, ferrosilicon, steel, rolled products, hardware, heat and electric power. Mechel products are marketed domestically and internationally.