Karaganda, Kazakhstan – February 3, 2006 – Mechel OAO (NYSE: MTL) has announced the sale of a coal mining subsidiary located in Kazakhstan, Mechel Coal Resources TOO, for approximately US$12 million.

Acquired in 2003, Mechel Coal Resources at that time consisted of a closed coal mine and a coal washing plant. In 2005, Mechel Coal Resources had restored mining operations, but mined only 23 thousand tonnes of coal in the nine months of 2005, an insignificant production level when compared with Mechel’s Russian coal facilities, which mined more than 11.7 million tonnes of coal in the same period of 2005.
“Today Mechel owns one of the largest coal reserves base among Russian producers. In 2005 alone, we increased our coking coal reserves by 1.15 billion tonnes, based on the Russian valuation standards. The dynamic growth of this huge resource base requires significant financial and managerial efforts. We believe it is a logical move to drop a small and remote asset and focus on our Russian operations with their vast existing infrastructure and experienced staff,” said Mechel’s CEO Vladimir Iorich.