Moscow, Russia – June 8, 2007, – Mechel OAO (NYSE: MTL) today announced an agreement with Danieli to provide for the modernization of Mechel’s steel operations. The agreement follows a meeting between Mechel’s Chief Executive Officer Igor Zyuzin and Danieli’s Chairman and CEO Gianpietro Benedetti.

The new agreement was signed during a visit of a delegation of specialists from Danieli, Italy to Mechel OAO. The meeting was attended by Danieli’s Chairman and CEO Gianpietro Benedetti as well as executives from Mechel including Chief Executive Officer Igor Zyuzin, Mechel Management OOO CEO Vladimir Polin, and the management of Chelyabinsk Metallurgical Plant (CMP), Mechel’s major steel producing subsidiary.

The agreement between Mechel and Danieli, a leading world technological developer and manufacturer of equipment for metallurgical production, will include the re-equipment of a CMP’s electric arc furnace No.6 with fundamental modernization of its continuous caster to multiply its productivity by 3.5 - 4 times, to 1.2 million tonnes of slabs annually, commissioning of a ladle furnace and a vacuum vessel. Implementation of the project will allow Mechel to increase its output including stainless and construction steel products with concurrent improvement of quality and reduction of production costs. Also under consideration is the joint work in reconstruction of the steel melting and rolling production.

Mechel and Danieli have had a longstanding collaboration, which has included projects for two continuous casting machines of one million tonnes capacity each, successfully commissioned over the last three years. These units are among the major facilities included in the technical re-equipment program of Mechel’s subsidiaries. Their startup was performed in line with the implementation of the strategic objective of putting Mechel’s steel melting mostly on continuous casting technology with the view to improve Mechel’s steel segment performance.

“Mechel’s long-term technical re-equipment program is based on state-of-the-art technologies in the field of steel production. We are confident that collaboration with world leading equipment engineering companies such as Danieli will enable Mechel to achieve its strategic objectives set to improve the performance of its steel segment by implementing modern technologies for steel melting and casting, as well as modernizing its rolling production and finishing,” – Mechel Management OOO CEO Vladimir Polin commented.