Moscow, Russia– May 10, 2012 – Mechel OAO (NYSE: MTL), a leading Russian mining and steel group, today announced financial results for the full year 2011.

Revenue amounted to $12.5 billion
Consolidated adjusted EBITDA amounted to $2.4 billion
Net income attributable to shareholders of Mechel OAO amounted to $728 million

Mechel OAO’s Chief Executive Officer Yevgeny Mikhel commented on the 2011 financial results: “On the whole, last year was quite successful for the Group. Despite difficulties with economic development in many countries that are traditional customers of Mechel’s products, volatility in the financial markets and ambiguous price dynamics for our company’s key products, we not only managed to implement a fairly large-scale investment program and advance on our key projects, but also improve on the previous year’s main financial parameters. In that, a major role was played by the company’s competitive advantages such as a full range of coal and steel products offered by our sales branches, expansive geographical presence and the leading positions maintained by the company’s divisions in their market segments, supported by the holding’s integrated structure.”

Consolidated Results For The Full Year 2011

(1) See Attachment A.

(2) Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, forex gain/(loss), net result on the disposal of non-current assets, amounts attributable to non-controlling interests and interest income. Consolidated Results For The 4Q 2011

Consolidated Results For The 4Q 2011

⁽¹⁾See Attachment A.

⁽²⁾Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, forex gain/(loss), net result on the disposal of non-current assets, amounts attributable to non-controlling interests and interest income.

The net revenue in 2011 increased by 28.7% and amounted to $12.5 billion compared to $9.7 billion in 2010. The operating income rose by 19.5% and amounted to $1.8 billion or 14.60% of the net revenue, compared to the operating income of $1.5 billion or 15.72% of the net revenue in 2010.

In 2011, Mechel’s consolidated net income attributable to shareholders of Mechel OAO increased by 10.8% to $727.9 million compared to the consolidated net income attributable to shareholders of Mechel OAO of $657.2 million in 2010.

The consolidated adjusted EBITDA in 2011 increased by 18.7% to $2.4 billion, compared to $2.0 billion in 2010. Depreciation, depletion and amortization in 2011 for the Company were $561.1 million, an increase of 18.2% compared to $474.6 million in 2010.

Mining Segment Results For The Full Year 2011

⁽¹⁾See Attachment A.

⁽²⁾Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, forex gain/(loss), net result on the disposal of non-current assets, amounts attributable to non-controlling interests and interest income.

⁽³⁾Adjusted EBITDA margin is calculated as a percentage of consolidated revenues of the segment, including intersegment sales.

Mining Segment Results For The 4Q 2011

⁽¹⁾See Attachment A.

⁽²⁾Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, forex gain/(loss), net result on the disposal of non-current assets, amounts attributable to non-controlling interests and interest income.

⁽³⁾Adjusted EBITDA margin is calculated as a percentage of consolidated revenues of the segment, including intersegment sales

Mining Segment Output and Sales For The Full Year 2011

Product Sales:

Mechel’s steel segment’s revenue from external customers in 2011 amounted to $7.2 billion, or 57.0% of the consolidated net revenue, an increase of 28.1% over the net segment’s revenue from external customers of $5.6 billion, or 57.3% of consolidated net revenue, in 2010.

In 2011, the steel segment’s operating income decreased by 35.6% and totaled $191.7 million, or 2.6% of total segment’s revenue, versus the operating income of $297.6 million, or 5.1% of total segment’s revenue, in 2010. The adjusted EBITDA in the steel segment in 2011 decreased by 22.9% and amounted to $318.9 million, compared to the adjusted EBITDA of $413.6 million in 2010. The adjusted EBITDA margin of the steel segment was 4.27% in 2011, versus the adjusted EBITDA margin of 7.09% in 2010. Depreciation and amortization in steel segment rose by 13.6% from $110.9 million in 2010 to $126.0 million in 2011.

Mechel-Steel Management OOO’s Chief Executive Officer Andrey Deineko noted in commenting on the steel segment’s results: “Steel products markets’ deterioration in the fourth quarter of 2011, which led to lower demand and steel prices, brought about a decrease in the division’s earnings. This factor especially affected our Romanian enterprises, which mostly supply their products to the European market. The decrease in sales of the Romanian enterprises’ finished products led to an increase in production costs, which put marked pressure on the division’s financial results both in the fourth quarter and for the year as a whole. It must be noted, however, that volatility on the steel markets was significantly offset by the Mechel Service Global sales network, which has grown much in the past 3 years. We can confidently say that major funds we invested in this project, including those from the working capital, were justified, as it minimized the effect of decreased demand on our cash flow thanks to a much wider sales geography. 6

“The reporting period was marked by a series of positive events. For example, in the fourth quarter of 2011 we cut production costs for steel products at Chelyabinsk Metallurgical Plant. Chelyabinsk Metallurgical Plant also launched a new quality steel producing complex, which will work within the same production cycle as the universal rolling mill. As part of our efforts to cut costs, we are reconsidering production plans in favor of more profitable products, optimizing technological processes and consumption indices.”

Ferroalloys Segment Results For The Full Year 2011

⁽¹⁾See Attachment A.

⁽²⁾Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, forex gain/(loss), net result on the disposal of non-current assets, amounts attributable to non-controlling interests and interest income.

⁽³⁾Adjusted EBITDA margin is calculated as a percentage of consolidated revenues of the segment, including intersegment sales.

Ferroalloys Segment Results For The 4Q 2011

⁽¹⁾See Attachment A.

⁽²⁾Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, forex gain/(loss), net result on the disposal of non-current assets, amounts attributable to non-controlling interests and interest income.

⁽³⁾Adjusted EBITDA margin is calculated as a percentage of consolidated revenues of the segment, including intersegment sales.

Ferroalloys Segment Output and Sales For The Full Year 2011

Product Sales:

Ferroalloys segment’s revenue from external customers in 2011 amounted to $475.3 million, or 3.8% of the consolidated net revenue, an increase of 4.4% compared with the segment’s revenue from external customers of $455.2 million or 4.7% of the consolidated net revenue, in 2010.

In 2011, the operating loss in the ferroalloys segment totaled $44.9 million, or -6.66% of total segment’s revenue, as compared to operating income of $23.0 million, or 3.65% of total segment’s revenue, in 2010. The adjusted EBITDA in the ferroalloys segment in 2011 decreased by 51.4% and amounted $45.9 million, compared to segment’s adjusted EBITDA of $94.4 million in 2010. The adjusted EBITDA margin of the ferroalloys segment comprised 6.8% in 2011 compared to the adjusted EBITDA margin of 15.0% in 2010. Ferroalloys segment’s depreciation, depletion and amortization in 2011 were $90.0 million, an increase of 33.7% over $67.3 million in 2010.

Mechel-Ferroalloys Management OOO’s Chief Executive Officer Gennady Ovchinnikov noted: “The fourth quarter was characterized by ambiguous trends which had their effect on the segment’s results. We managed to stabilize nickel costs to a certain extent. During test probes on chrome briquette producing equipment we decreased ferrochrome production costs despite growing chrome ore concentrate prices. We expected to see a certain growth in ferrosilicon production costs in the fourth quarter, due to the reconstruction of Bratsk Ferroalloy Plant’s furnace # 4, which was launched into production in the first quarter of 2012 as planned. At the same time the degressive price dynamics for the division’s finished products continued to affect the division’s financial parameters. We see further ways to optimize costs at Bratsk Ferroalloy Plant, where a modernized furnace was launched, as well as works are underway to transfer the plant fully to its own resource base at the Uvatsk quartzite deposit. We expect further improvements at Tikhvin Ferroalloy Plant, where the chrome briquette producing workshop is working at full capacity since the first quarter of this year.”

Power Segment Results for The Full Year 2011

⁽¹⁾See Attachment A.

⁽²⁾Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, forex gain/(loss), net result on the disposal of non-current assets, amounts attributable to non-controlling interests and interest income.

⁽³⁾Adjusted EBITDA margin is calculated as a percentage of consolidated revenues of the segment, including intersegment sales.

Power Segment Results for The 4Q 2011

⁽¹⁾See Attachment A.

⁽²⁾Adjusted EBITDA is EBITDA adjusted for effects of remeasurement of contingent liabilities at fair value, forex gain/(loss), net result on the disposal of non-current assets, amounts attributable to non-controlling interests and interest income.

⁽³⁾Adjusted EBITDA margin is calculated as a percentage of consolidated revenues of the segment, including intersegment sales.

Power Segment Output and Sales For The Full Year 2011

Mechel’s power segment’s revenue from external customers in 2011 comprised $776.7 million, or 6.2% of consolidated net revenue, an increase of 18.8% compared with the segment’s revenue from external customers of $653.7 million or 6.7% of consolidated net revenue in 2010.

The operating income in the power segment in 2011 amounted to $23.8 million, or 1.9% of the total segment’s revenue in the same period, a decrease of 49.2% compared to the operating income of $46.7 million, or 4.4% of the total segment’s revenue, in 2010. The adjusted EBITDA in the power segment in 2011 went down by 39.5% totaling $36.5 million, compared to the adjusted EBITDA of $60.4 million in 2010. The adjusted EBITDA margin for the power segment in 2011 amounted to 2.9% compared to 5.7% in 2010. Depreciation and amortization in power segment in 2011 increased by 10.95% comparing with the 2010 from $14.98 million to $16.62 million.

Mechel-Energo OOO’s Chief Executive Officer Yuri Yampolsky noted: “The division’s results improved in the fourth quarter as expected, which was due to the heating season and an increase in capacity utilization. The segment had positive results in operational profit and EBITDA. Nevertheless, growing commercial costs, mostly due to rising electricity traffic tariffs, had a marked effect on the end result. In order to improve the situation, we have worked out and are implementing a series of steps aimed at cutting production costs as well as optimizing the capital expense program.”

Recent Highlights

In December 2011 Mechel announced the launch of 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 concaster #5 is part of a complex which produces rail steel and rail billets. The estimated funding for the complex, including the blooming concaster #5, the ladle furnace # 4 and the vacuum degasser, totals some 189 million dollars.

In December 2011 Mechel announced the launch of the reconstructed coke-oven battery #5 at Mechel-Coke OOO. The battery’s annual capacity is 470,000 tonnes of coke. Once the battery reaches full load, Mechel-Coke will produce over 3.1 million tonnes of coke a year, boosting production by 17%. Reconstruction of coke-oven battery #5’s facilities cost a total of 1.8 billion rubles (approximately 56.2 million US dollars).

In December 2011 Mechel announced closure of the transaction for the acquisition of 100% of the shares of Donetsk Electrometallurgical Plant (DEMZ AO) with an annual capacity of over 1 million tonnes. The consideration of $537 million is payable over several years.

In January 2012 Mechel announced that it has finished laying tracks along the entire route of the railway link from Ulak station to the Elga coal deposit. This has opened traffic along the entire route from Baikal-Amur Mainline’s Ulak station to the Elga deposit. The railway track’s construction has thus far required investment of some 40 billion rubles (1.25 billion US dollars). Construction involved laying 321 kilometers of tracks.

On February 10^th, 2012 Mechel reported that work was temporarily halted at several facilities at New-Olzherassk mine which is part of Southern Kuzbass Coal Company. Following a check conducted by the Mezhdurechensk territorial branch of the Southern Siberian department of the Federal Agency for Ecological, Technological and Nuclear Monitoring, mining at New-Olzherassk mine was suspended by order of the Mezhdurechensk city court. On February 16 ^th, 2012 Mechel reported that work at several facilities at New-Olzherassk mine was resumed fully. Administrative suspension of work at several facilities at New-Olzherassk mine was lifted ahead of schedule by order of the Mezhdurechensk city court as all grounds for the suspension have been eliminated.

In February 2012 Mechel announced successful closure of the books for the placement of its BO-04 series bonds. The funds procured by the placement will be used to re-finance short-term debt facilities. The bonds have a total nominal value of 5.0 billion rubles (approximately 167 million US dollars). The first coupon rate is 10.25% per year. VTB Capital ZAO, Otkritie Bank OAO, Troika Dialog Investment Company ZAO and Coalmetbank OAO acted as managers of the placement.

In February 2012 Mechel reported that work was temporarily halted at Mechel Campia Turzii and Ductil Steel Buzau plants due to problems with shipping in raw materials because of severe weather conditions.

In February 2012 Mechel reported that smelting production was temporarily halted at Mechel Targoviste and Ductil Steel Otelu Rosu plants due to problems with shipping in scrap because of severe weather conditions.

In February 2012 Mechel reported the launch of a chrome briquette producing workshop at Tikhvin Ferroalloy Plant that will allow to increase the furnaces’ capacity from 12 to 14.4 MW, significantly broaden the plant’s ore base and fully use the dust formed during the gas purification process. The briquette-producing workshop will have the monthly production capacity of 5,500 tonnes of chrome briquettes. Investment in the project totaled over 350 million rubles (proximately 11.8 million US dollars).

In February 2012 Mechel announced that coal mining at Southern Kuzbass Coal Company OAO’s New-Olzherassk Underground mine’s long wall face # 21-1-7 has been temporarily halted due to coal self-heating. Mining operations are currently suspended.

In February 2012 Mechel reported that the environment management system at Tikhvin Ferroalloy Plant was certified as compliant with the international ISO 14001 standard. The certificate was granted by the international auditing company TUV SUD Management Service.

In March 2012 Mechel reported that a ceremony was held to launch the first line of Chelyabinsk Metallurgical Plant’s universal rolling mill — a complex producing quality steel. 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. Investment in the entire rail- and beam-producing complex will total 853.9 million dollars.

In March 2012 Mechel reported that smelting production at Otelu Rosu has been temporarily halted due to a contingency situation. As a result of a malfunction in the technological process, slag and steel went through the inner protective coating of an electric arc furnace #2. Operations at Otelu Rosu’s smelting workshop resumed on March 24. All of the incident’s effects were eliminated as a result of measures implemented at the plant.

In March 2012 Mechel announced receiving subsoil licenses for researching, investigating and extracting iron ore in the Sutamsky area and in the Sivaglinsky deposit, both located in the Republic of Sakha (Yakutia)’s Neryungri region. The Sutamsky iron ore area is about 3,300 square kilometers and consists of several promising iron ore deposits. The license area is over 740 square kilometers. Its estimated reserves under Russian standards are 1.35 billion tonnes. Sutamsky ores’ Fe content averages 32-40%. The 25-year subsoil license for the Sutamsky iron ore area’s plot cost some 91 million rubles (3 million US dollars). Reserves of the Sivaglinsky deposit under Russian standards are about 26.4 million tonnes. The 10-year subsoil license for use of Sivaglinsky reserves cost some 140 million rubles (4.7 million US dollars).

In March 2012 Mechel announced that a ferroalloy electric furnace was installed and the first smelting of ferrosilicon conducted as part of modernization of Bratsk Ferroalloy Plant. Bratsk Ferroalloy Plant’s reconstruction began in late 2010 and will be completed in 2013. After the new furnaces are commissioned, Bratsk Ferroalloy Plant’s production capacity will increase by 30% and its power consumption will be reduced by 10-13%. Investment in the project topped 1.9 billion rubles (65 million US dollars).

In March 2012 Mechel announced that it commenced discussions with its lenders seeking waivers and amendments to certain of its credit facilities. In April 2012 Mechel announced completion of talks with lenders resulting in waivers and amendments to certain major credit facilities. These talks were successfully completed on April 26, 2012, as lenders confirmed their agreement to waivers on a number of credit facilities and including a significant structural change to financial covenants. These changes to the financial parameters will increase the company’s financial and operational flexibility, even in the event that price volatility on key markets increases.

In April 2012 Mechel announced the successful closure of the books for the placement of its BO-05, BO-06, BO-07, BO-11 and BO-12 series bonds. The bonds have a total nominal value of 15.0 billion rubles (approximately 510 million US dollars). The first coupon rate is 11.25% per year. The funds procured by the placement have been used solely for the re-financing of the short-term debt. VTB Capital ZAO and Coalmetbank OAO acted as the joint bookrunners for the placement.

In April 2012 Mechel announced the extension of credit facilities totalling 13.6 billion rubles (approximately 462 million US dollars) previously obtained from VTB Bank for Mechel’s enterprises. Subsidiaries of Mechel Mining, which is part of Mechel Group, and VTB Bank signed amendments to the credit facilities, extending the maturities by three years until 2015.

In April 2012 Mechel reported acquiring 15 BelAZ mining dump trucks. The mining dump trucks are acquired on behalf of Yakutugol Holding Company OAO and Korshunov Mining Plant OAO on lease contracts signed with Sberbank Leasing ZAO. The sum of those contracts totaled 870 million rubles (29.5 million US dollars).

In May 2012 Mechel announced the signing of long-term loan facilities with Gazprombank on providing credit lines to Yakutugol Holding Company OAO and Southern Kuzbass Coal Company OAO in the aggregate amount of 500 million US dollars. The new loan facilities include a five-year tenor with a three-year grace period.

In May 2012 Mechel announced signing agreements with Gazprombank for the extension of credit facilities totalling 22 billion rubles (approximately 750 million US dollars).

In May 2012 Mechel reported that mining at Southern Kuzbass Coal Company OAO’s Sibirginsk Mine was resumed.

 ***

Financial Position

Capital expenditure on property, plant and equipment and acquisition of mineral licenses for the FY 2011 amounted to $1,829.5 million, of which $1,209.7 million was invested in the mining segment, $539.0 million was invested in the steel segment, $62.1 million was invested in the ferroalloy segment and $18.7 million was invested in the power segment.

As of December 31, 2011, total debt was at $9.9 billion. Cash and cash equivalents amounted to $643.4 million and net debt amounted to $9.3 billion (net debt is defined as total debt outstanding less cash and cash equivalents) at end of 4Q 2011.

The management of Mechel will host a conference call today at 10:00 a.m. New York time (3:00 p.m. London time, 6:00 p.m. Moscow time) to review Mechel’s financial results and comment on current operations. The call may be accessed via the Internet at https://www.mechel.com, under the Investor Relations section.