Today the city of Kolpino near Saint Petersburg became the site of a ground breaking ceremony for the construction of a plant which will produce stamped parts for the automotive sector, and a steel service centre.

The ceremony was attended by the President of Russia Vladimir Putin, Saint Petersburg’s Governor Valentina Matvienko, and the Chairman of the OJSC MMK Board of Directors Victor Rashnikov. Speaking at the ceremony Mr.Rashnikov said that the new facility to be located within the site of the Izhorsky Plants in Kolpino will comprise an integrated complex for production of auto body components and sub-assemblies to the highest international standards. “The growing market, and the consumers’ requirements for high quality steel sheet and stamped products lend us confidence in the successful implementation of the project and its promising future”, Mr. Rashnikov added. MMK’s top executive thanked President Putin who had approved the company’s plans to become a supplier for auto makers, and expressed his gratitude to Saint Petersburg’s Governor Valentina Matvienko for her strong interest in the project.

The ground breaking ceremony also featured a presentation which explained to the participants that the goal of the project is to set up production of stamped and welded auto body components and white goods’ parts from sheet steel through processing 150 ktpy of rolled steel at the stamping plant and 200 ktpy at the steel service centre.

The project crowns OJSC MMK’s consistent effort towards setting up a production route capable of producing high quality auto body components in Russia which will comply with the requirements of the leading international auto making companies.

Thus, in July of 2007 MMK signed a contract for the construction and delivery of a 2,000 mm cold rolling mill (MMK’s Rolling Shop #11) which will produce high quality sheet, with the German equipment manufacturer SMS Demag. The new shop will turn out over 2 mtpy of high quality cold rolled and galvanized products using state-of-the-art technology, intended for exterior and interior car parts, the white goods and construction industries.

In August of 2007 MMK purchased a 75% stake in ZAO Intercos-IV, a Saint Petersburg company, specializing in the development and production of large-size stamps and dies (up to 70 tonnes) and stampings for the automotive and white goods sectors.

In early September of 2007 Saint Petersburg’s Governor Valentina Matvienko and Mr.Rashnikov signed an Investment Agreement according to which OJSC MK is to build a stamping plant and steel service centre in Saint Petersburg by 2010, with the proposed investments amounting to RUB 3 billion.

Products from the new plant will be supplied to the existing and projected auto making factories, such as FORD, TOYOTA, General Motors Company, NISSAN and others, and white goods manufacturers operating in Russia and abroad, such as BOSCH-SIEMENS, ELECROLUX, etc. Products from the steel service centre will go to the construction sector, mechanical engineering, ship building and other consumers in Saint Petersburg and the Leningrad Region. Direct supplies of rolled steel from the Magnitogorsk Iron and Steel Works and their subsequent processing at the projected facilities will allow to meet the requirements of steel consuming industries in the best possible way.

About MMK

OJSCMagnitogorsk Iron & Steel Works ("MMK") ranks 20th among the world's largest steel producers (Source: IISI) and is one of the largest steel producers in Russia (Source: Chermet). It accounts for 17% of total Russian output of steel products (Source: Chermet). MMK is a major steel mill with a fully integrated production cycle, from the preparation of iron ore through to downstream processing of steel. MMK believes that is produces the broadest range of steel products among Russian and CIS steel producers, and has a particular focus on high- value added steel products. In 2006, the Company produced 12.5 million metric tons of crude steel and shipped 11.3 million metric tons of commercial steel products.  Revenue of OAO MMK and its consolidated subsidiaries in 2006 in accordance with US GAAP totaled 6.4 billion USD and net income was 1.4 billion USD.