Moscow, Russia – February 18, 2015 – Mechel OAO (MICEX: MTLR, NYSE: MTL), one of the leading Russian mining and metals companies, has closed a deal on the disposal of Mechel Bluestone, Inc. (Delaware, USA), including its mining operations, to a company owned by the Justice family.

The deal includes:

•     An immediate cash payment of $5 million
•     Royalty payments on coal mined and sold in an amount of $3.00 per ton
•     Portion of any future sale of the company and/or its assets of 12.5% of the sale price if within five years of transaction close or 10% of the sale price after year five, but before year ten.

In addition, as part of the transaction, the parties agreed to terminate all claims against each other, including their unresolved dispute related to the calculation of a contingent payment obligation arising out of the 2009 transaction in which Mechel obtained the Bluestone assets from Justice.

“As part of the revised development strategy we continue disposing of non-core and non-strategic assets. With the market situation being what it is, mining at Mechel Bluestone’s mines and open pits is not profitable. The company’s average annual net loss since 2012 was around $60 million. Selling Mechel Bluestone will not only enable us to avoid these losses, but also takes some $140 million of liabilities off the Group’s balance sheet and allows us to avoid over $160 million worth of legal risks. The sale will allow us to focus the freed cash flows on servicing the company’s debt,” Mechel OAO’s Chief Executive Officer Oleg Korzhov commented.

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Mechel OAO

Ekaterina Videman

Phone: +7 495 221-88-88

ekaterina.videman@mechel.com