Mechel acquired 100% stake in Ductil Steel of Romania

Mechel announces its purchase of 100% stake in Ductil Steel of Romania. The purchase is in line with further strategic development of Mechel’s steel segment, and is also aimed at maintaining Mechel’s position in the Romanian rolled and wire product markets of Romania.

On March 28, 2008, Mechel’s subsidiary, Mechel International Holdings AG, Switzerland, received approval from the Romanian Antimonopoly Committee to acquire the sole control of

Ductil Steel.

On April 8, 2008, Mechel acquired 100% of the charter capital of Ductil Steel for EUR 142.0 mln (USD 221.0 mln). The purchase price includes 180,000 ordinary shares from Lakewind Limited.

Ductil Steel has the following production facilities: Ductil Steel Buzau plant (Buzau, Romania), which produces carbon and low alloyed steel rolled and wire products and Otelu Rosu plant (Otelu Rosu, Romania) which produces steel and billets for rolling, which are supplied to Ductil Steel Buzau and to third parties both domestically and abroad for further processing.

In 2007, Ductil Steel produced approximately 340,000 tn of liquid steel, 320,000 tn of billets for rolling, 180,000 tn of rebars, 105,000 tn of different sorts of wire, 68,000 tn of wire rod, and 48,000 tn of mesh.

Mechel Chief Executive Officer Vladimir Polin commented on the transaction, “The integration of Ductil Steel’s production and marketing facilities will allow Mechel to further develop its steel business, particularly in Romania and Eastern Europe, and will contribute to the economy of Romania, where two other Mechel’s subsidiaries currently operate – Mechel

Targoviste and Mechel Campia Turzii. In addition, this acquisition will further optimize our existing production chain while reducing costs.”