Mechel OAO, one of the leading Russian mining and metals companies, announced today its operational results for 2007. They showed a major increase in coal output -steaming coal up to 10.7 Mt and coking coal to about 10.5 Mt. CEO Vladimir Polin commented: “Last year was exceptionally successful for Mechel’s production operations as we increased the output of our main products. Due to the successful implementation of the technical re-equipment program for Mechel’s mining subsidiaries, our coal production has grown significantly, having surpassed our planned indicators by nearly 3 Mt, which was also supported by the acquisition of Yakutugol OJSHC. Iron ore concentrate production at Korshunov Mining Plant was approximately 5 Mt, the same level as in the preceding year and consistent with the plant’s designed capacity. Favorable market pricing for nonferrous metals and more efficient utilization of our Southern Urals Nickel Plant’s production capacity enabled Mechel to significantly increase its nickel output.”Polin continued: “We also achieved high production levels in our steel segment. Mechel’s acquisition of Bratsk Ferroalloy Plant in the fall of 2007 strengthened the promising ferrosilicon segment of its business. We increased steel and rolled product output in 2007 and significantly expanded our steel product mix in terms of grades and sections, specifically in hardware production. This was facilitated primarily by the large scale technical re-equipment program for our Beloretsk Metallurgical Plant subsidiary, which specifically provides for commissioning modern hardware equipment. We continued to demonstrate consistent growth of our coke output, which is supported by the efficient operations of our Moscow Coke and Gas Plant and the new coking battery at Chelyabinsk Metallurgical Plant.”

He concluded: “Mechel has acquired a number of power assets since the beginning of 2007, significantly expanding its presence in the power sector. As the result of the acquisitions, we established an integrated power division with its own raw material base, power generating facilities and broad client base. As seen in the operational results, the division demonstrated intensive growth of electric power generation in 2007. We are confident in the future of the new segment, which we are able to operate efficiently considering our experience in effectively integrating acquired companies.”

Product 2007, thousand tonnes 2007 as compared to 2006, % Coal* 21,195 + 25   Coking Coal* 10,419 + 7   Steam Coal* 10,775 + 47 Iron Ore Concentrate 4,963 0 Nickel 17.14 + 19 Ferrosilicon** 37.8 n/a Hardware 683 + 12 Forgings 80 + 7 Stampings 95 + 6 Rolled Products 5,137 + 9   Flat Products 393 – 2   Long Products 3,040 + 20   Semi-Finished Products 1,704 – 5 Steel 6,090 + 2 Pig iron 3,685 + 1 Coke 3,886 + 51 Electric power generation (ths. kWh) 3,361,423 +79

* The coal production figures show the output including the coal production of Yakutugol OAO in the fourth quarter of 2007.
** The ferrosilicon production figures show the output of Bratsk Ferroalloy Plant from August 2007.