The resolution on the creation of the branch was passed by the OJSC MMK Board of Directors on December 14, 2007.

The task of the new branch of OJSC MMK (named “Prioskolsky Iron Ore Mining and Beneficiation Plant”) to be located in the city of Stary Oskol, will be to implement the project of developing the Prioskolsky Iron Ore Deposit under the federal license awarded to OJSC MMK in December of 2006 as a result of an auction.

The Prioskolsky Iron Ore Deposit is located in the south-east part of the Stary Oskol District of the Belgorod Region at a distance of about 2,000 km from MMK. The deposit contains 45.2 million tonnes of high-grade ore and over 2 billion tonnes of ferruginous quartzites as confirmed by the Russian Federal Reserves Committee. In September of 2007 Victor Rashnikov, Chairman of the OJSC MMK Board of Directors, and Yevgueny Savchenko, Governor of the Belgorod Region, signed an agreement on Socio-Economic Cooperation between MMK and the Belgorod Region. According to MMK’s plans, the construction of the Prioskolsky Iron Ore Mining and Beneficiation Plant will start as early as 2009, with the design capacity to be reached by 2016. It is expected that the Plant will mine up to 35 million tonnes of raw iron ore and produce about 15 million tonnes of iron pre pellets and concentrate per year, which, adding the supply from the Bakal Mine and MMK’s captive mining facility, will allow to completely cover the Company’s requirement for iron ore materials.

The setting up of the branch in the Belgorod Region will secure MMK divisions’ direct involvement in solving the technological, legal and financial issues  of the project and accelerate the process of obtaining relevant approvals and permits for the project. In the future the branch may be converted into an independent legal entity.