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July 16, 2013

Mechel announces launch of universal rolling mill at Chelyabinsk Metallurgical Plant

Chelyabinsk, Russia ó July 16, 2013 Ė Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces the launch of the universal rolling mill at Chelyabinsk Metallurgical Plant. Russiaís Prime Minister Dmitry Medvedev launched the mill in an official ceremony. The companyís and the plantís management and other officials attended the ceremony.

The universal rolling mill is Russiaís first complex universal producer of high-quality structural shapes and rails of 12.5 to 100 meters long. The millís complex includes all necessary technological equipment and uses state-of-the-art rolling, correction, processing and quality control technologies. The millís capacity is up to 1.1 million tonnes of finished product a year. Investment in the project totaled some 715 million US dollars.

Italyís Danieli acted as equipment supplier for the mill, with Chinaís Minmetals the millís primary contractor. The millís active construction phase took two years. The millís primary building is some 1.5 kilometers long, with the longest technological line for rail production over 3 kilometers long. As a result of implementing the project at Chelyabinsk Metallurgical Plant, over 1,500 new jobs were created. Besides, due to the use of advanced technologies during the millís construction, the plantís negative impact on the environment will be dramatically decreased due to old equipment being taken out of commission and new cleansing equipment installed.

The rails produced at the mill are due to be supplied to Russian Railways OAO as part of the Development Strategy for Russian Railway Transport until 2030, approved by the Russian government and including modernization and construction of new railways all over the country. In February 2008, Mechel OAO and Russian Railways OAO signed an agreement for long-term mutually beneficial partnership in providing Russian railways with transport steel rolls. Chelyabinsk Metallurgical Plant and Russian Railways OAO also signed a contract for annual rail supplies of up to 400,000 tonnes until 2030.

The new rails will be superior to their foreign analogues on several key counts, due to the climatic and other specifics of rail exploitation in Russia, such as resistance to low temperatures, high wear and contact resistance.

ďThe millís launch is a most important event not only for our company, but for the Russian economy as a whole as we will be able to fully meet the needs of Russian customers interested in the universal rolling millís products. The project has been successfully completed despite the challenging situation in the Russian and global steel industry. We expect that once the mill reaches its project capacity, it will significantly improve financial results of Mechelís steel segment. We are proud that our steel will join Russian regions in a network of state-of-the-art high-speed railways,Ē Chairman of Mechel OAOís Board of Directors Igor Zyuzin noted.


Mechel OAO
Elena Andreyeva
Phone: +7 495 221-88-88




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