Today MMK signed a number of contracts and loan agreements for the delivery of equipment and services and financing of MMK's modernization projects.

As part of the 2,500 mm Rolling Mill Revamping Project OJSC MMK signed a contract for the delivery of equipment and erection supervision services with ALTA, a.s.(Czech Republic) ("ALTA"), and a contract with PSG International a.s (Czech Republic) ("PSG International") for construction and erection services.

Besides, as part of a project to build a continuous slab caster (¹6) and a secondary steel treatment unit in the Company's BOF Shop MMK signed a contract with PSG International. To finance these projects MMK and the Czech Export Bank executed loan agreements for a total amount of USD 155.5 million.

The documents were signed by Victor Rashnikov, President of the MMK Managing Company, Vladimir Plašil, Chairman of ALTA's Board of Directors, Yuraj Surovič, Vice Chairman of the Board of PSG International, and Lubomir Pokorny, Chief Executive Officer of the Czech Export Bank.

The signing ceremony was attended by the Czech Minister of Industry and Trade Martin Řiman, the Czech Ambassador in the Russian Federation Miroslav Kostelka, and officials of the Czech Ministries of Foreign Affairs and Finances.

Commenting on the signing of the contracts and loan agreements, Mr.Rashnikov said: "The Russian market remains a priority for MMK. In the current situation the replacement of imports from foreign manufacturers with domestic products and raising the quality of such products has a tremendous importance for the Russian economy. I am certain that the implementation of these projects will allow to meet the strictest requirements of our customers and help strengthen MMK's competitive position."

The ¹ 6 continuous slab caster and the secondary steel treatment unit in the BOF Shop are being built as part of the 5,000 mm Plate Mill Project. The processes for manufacturing large-diameter pipes and auto body sheets require that the steel properties meet the most rigorous standards. Practically all the steel for these uses has to go through vacuum degassing.

The purpose of the secondary treatment unit is precisely to ensure that all the steel poured into the ¹ 6 continuous caster acquires the characteristics needed to produce plate with a class of strength of up to X120 used for the production of large-diameter pipes, and to broaden the steel grades' mix, especially as regards special steels.

These facilities will provide the 5,000 mm Plate Mill with high quality slab 190, 250 and 300 mm thick and up to 2,700 mm wide, thus enabling MMK to set up a complete cycle for production of plate for the pipe sector, bridge, ship and boiler builders.

Following the signing ceremony, the Czech delegation, which included many representatives of the Czech business circles, made a tour of the MMK's plant site.

Information on the projects:

Construction of the ¹ 6 Continuous Slab Caster

The ¹ 6 continuous slab caster in MMK's BOF Shop is part of the 5,000 mm Plate Mill's complex. The annual capacity of this one-strand radial curvilinear casting machine will reach 1.8 m tons. The contract for the delivery of the caster's equipment was signed in November of 2006 with SMS Demag, Germany, with Uralmash, Russia, Siemens-VAI, Austria, and Danieli, Italy, also taking part in the equipment manufacturing. The total cost of the project, scheduled to go on stream in the 4 th quarter of 2009, is estimated at USD 200 million.

Construction of the Secondary Steel Treatment Unit in the BOF Shop

The new unit will treat at least 2 m tons of steel per year. It will have state-of-the-art equipment capable of treating all the steel grades produced by the BOF Shop, including steels for straight joint large-diameter pipes with an enhanced resistance to hydrogen sulfide, and corrosion-resistant pipes with a class of strength of X80 and higher, special purpose steels, shipbuilding and boiler steels, automotive steels (ultra low carbon, high-strength, dual-phase, multi-phase, TRIO steels), and steels for white goods manufacturing.

The secondary treatment unit will include such components as a two-station furnace ladle, a two-station circulation type vacuum degasser, a steel ladle deslagging stand, and a blending unit for soft steel blowing. The EUR 40 m contract for the delivery of the key process equipment was signed in 2007 with SMS MEVAC, Germany.

Revamping of the 2,500 mm Hot Strip Mill

When completed, this project will allow to broaden the product mix from the mill in terms of dimensions and grades and roll strip in the range of thickness of 1.2 to 25.0 mm as compared to 1.8 to 14.0 mm today, within the range of widths of 1,000 to 2,350 mm, in coils weighing up to 40 tons, with enhanced quality characteristics, to provide high quality coils for cold rolling and coating, and cut hot rolled coils into lengths to customer specifications. Besides, the revamping of the mill will make it possible to minimize power and material consumption. Once revamped, the mill will have three high-capacity (370 t/h) walking beam furnaces, a group of roughing stands, a pre-finishing stand, an intermediate roller table, a coiler, a coil transportation and removal line, and a cut-to-length line. A 12 MW gas turbine station will supply heat and steam to the mill. The main process equipment for the mill will be manufactured by the Novokramatorsk Mechanical Engineering Plant, Ukraine, with ALTA, a.s., Czech Republic, acting as the general supplier of both main process and off-contract equipment.).

Additional Information on ALTA:

ALTA, s.a., is a leading supplier of technology and equipment for the energy, machine tools and mining sectors. As a general contractor, ALTA provides a broad range of services in marketing, design, engineering and finances. Its activity is mainly focused on Russia and other CIS countries. In these regions the company specializes in exporting machine tools and metal-working equipment, technology for mining and processing mineral resources and technology and equipment for the manufacturing of construction materials. Its import operations are focused on supplying large quantities of iron ore materials, steam coal and fuel for the steel –making and energy sectors.