Beloretsk, Russia – February 4, 2008 – Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces that its Beloretsk Metallurgical Plant subsidiary succeeded in mastering a unique technology to produce stabilized reinforcing wire for prestressed concrete structures used in the construction industry.

The equipment supplied in March 2007 by one of the leading European manufacturers, KOCH –GSG, enables Mechel, for the first time in the world, to implement mechanical descaling and surface preparing of 9-16 mm diameter high carbon wire rod in the drawing line resulting in output of 3-8 mm high-tensile wire with 1,700-2,300 MPa maximum strength at the level of approximately 20 thousand tonnes annually. The investments in the project are approximately RUR97.0 million (approximately US$3.9 million).

Wire rod mechanical descaling and surface preparation in a drawing line became widely popular in Europe and the USA to process low carbon wire rod of up to 18.0 mm diameter and high carbon wire rod of 5.5-6.5 mm diameter. At the same time, wire for prestressed concrete structures was manufactured only from wire rod subjected to sulfuric or hydrochloric acid pickling followed by phosphatation.

European firms attempted several times to implement mechanical descaling of 9-16 mm diameter high carbon wire rod. But they failed to ensure a steady wire drawing process due to increased wear of drawing dies and growing breakage during drawing and, especially, during subsequent stabilizing tempering under tension.

In the process of manufacturing the equipment and developing and mastering the technology, the specialists of KOCH, TRAXIT, and Mechel jointly solved the following problems:

- Increase of the wire rod diameter required significantly higher intensity of mechanical descaling, which, in the processes applied previously, resulted in local quenching of the wire rod surface. Development and optimization of a new high performance descaling method was necessary;

- Development of special pre-lubricating salts with high adhesion characteristics and selection of modes for applying and drying it was required, as borax base pre-lubricating salts used previously did not provide adhesion of lubricants sufficient for repeated drawing of an increased diameter wire;

- Use of a big diameter air-patented wire rod required more intensive wire rod cooling in the Stelmor line to obtain fine structure. This presupposes optimization of wire rod rolling and cooling modes of rolling mill 150.

The work resulted in obtaining a stable drawing of 5.0 mm diameter wire at reasonable drawing speed, which is matching to phosphate coated stock material. The wire was successfully processed at the stabilizing line supplied by GCR - Eurodraw.

PC wire is used in such prestressed concrete structures as railroad ties, reinforced-concrete pressure pipes, road slabs, etc. Previously, mainly tempered high tensile wire was used for that purpose in Russia and CIS. Three to four times lower relaxation (losses of wire tension force) in final products and their 10%-30% higher strength enable builders to significantly reduce consumption of reinforcing materials.

“The new technological process enables producing high quality finished products, while complying with environmental and industrial safety requirements and reducing production costs. In addition, the process enables Mechel for the first time in Russia and CIS to implement manufacturing stabilized wire from Stelmor type wire rod, ensuring high production performance. The new equipment and technologies enable Mechel to manufacture stabilized reinforcing wire conforming to principal international standards, which have better consumer properties as compared to the GOST standard requirements,” Mechel Management OOO Chief Executive Officer Vladimir Polin commented.