Mechel OAO, founded in 2003, is one of leading global coal and steel producers.

Mechel’s fully integrated business consists of four segments: mining, steel, ferroalloys and power. The company has production facilities in 13 of Russia’s regions, as well as the United States, Kazakhstan, Romania, Lithuania, Bulgaria, United Kingdom and Ukraine.

Mechel is comprised of over 30 production enterprises, producing coal, iron ore concentrate, steel, rolled products, steel downstream products, ferroalloys, heat and electric power. All of the group’s enterprises work within a single production chain — from raw materials to high value-added products. The holding also owns three trade ports, a transport operator and international sales and service networks. Mechel’s products are sold in Russia and abroad. The company has about 93,000 personnel.

Mechel is one of the world’s top seven metallurgical coal producers (excluding Chinese producers), Russia’s top coking coal concentrate producer. The company controls over a quarter of Russia’s total coking coal washing facilities. Mechel is Russia’s second long steel manufacturer as well as the largest and the most diversified producer of specialty steels and alloys in the country.

Mechel is the first and still the only coal mining and metals company in the region of Eastern and Central Europe and Russia having its shares placed on the New York Stock Exchange. Starting in May 2010, Mechel’s preferred shares are also traded on the New York Stock Exchange.

Financial results of 2011’s nine months set Mechel’s net revenue at some 9,6 billion dollars, with net income at 527 million and EBITDA at some 1.9 billion dollars (in accordance with US GAAP).

MINING SEGMENT

Mechel Mining is a highly efficient mining company focusing on production and sales of coking coal concentrate, iron ore concentrate and coke, which are chief raw material for production of steel, and steam coal. Apart from providing for the needs of our steel and power segments, we sell significant volumes of raw materials to third-party consumers.

The company is a subsidiary of Mechel OAO, consolidating the group’s coal and iron ore assets.

Mechel Mining is a leading Russian coking coal producer as well as one of the world’s major coking coal concentrate producers. The group controls 19.2% of Russia’s coking coal washing facilities.

Mechel Mining comprises:

• Southern Kuzbass Coal Company OAO (Russia, Kemerovo Region);
• Yakutugol Holding Company OAO (Russia, Sakha Republic);
• Elga Coal Complex (subsidiary of Yakutugol Holding Company OAO, Russia, Sakha Republic);
• Mechel Bluestone coal company (USA, West Virginia);
• Korshunov Mining Plant OAO (Russia, Irkutsk Region);
• Moscow Coke and Gas Plant OAO (Russia, Moscow Region);
• Chelyabinsk Coke and Chemical Product Plant Mechel-Coke OOO (Russia, Chelyabinsk Region),

Mechel Mining’s headquarters are located in Moscow.

Mechel’s priority mining project is developing one of the world’s largest coking coal deposits — the Elga coal field — and construction of the 321-kilometer railroad which will link the deposit with Baikal-Amur Mainline. The launch of the deposit’s exploitation, scheduled for August 2011, will significantly strengthen Mechel’s position as a key world coking coal producer.

With the 2009 acquisition of the US-based coal company Bluestone, Mechel became a truly global player on the world coking coal concentrate market. Geography-wise, Mechel’s mining companies have great potential for supplying both domestic and international markets.

In 2010, Mechel’s enterprises produced 11.5 million tonnes of coking coal concentrate, some 2 million tonnes of other types of metallurgical coal, over 8 million tonnes of steam coal, as well as 4.2 million tonnes of iron ore concentrate and over 4 million tonnes of coke.

STEEL SEGMENT

Our steel business comprises production and sale of semi-finished steel products, carbon and specialty long products, stainless flat products, and value-added downstream metal products including hardware and stampings.

Our steel business is supported by our mining business, which includes coal (coking and steam), iron ore and limestone.

In 2008, Mechel produced about 6 million tonnes of steel, 5.4 million tonnes of rolled products, 3.5 million tonnes of pig iron, 3.3 million tonnes of coke, 719 thousand tonnes of hardware.

Mechel’s steel segment includes:

• Chelyabinsk Metallurgical Plant,
• Izhstal,
• Beloretsk Metallurgical Plant,
• Urals Stampings Plant,
• Vyartsilya Metal Products Plant,
• Mechel Targoviste (Romania),
• Mechel Campia Turzii (Romania),
• Ductil Steel Buzau (Romania),
• Otelu Rosu (Romania),
• Mechel Nemunas (Lithuania),
• Donetsk Electrometallurgical Plant (Ukraine, Donetsk),
• Invicta Merchant Bar (UK, Kent, Queenborough).

FERROALLOYS SEGMENT

As a leader in special steel production in Russia, Mechel requires a steady supply of ferroalloys of various types. In this regard we actively develop our ferroalloys business.

Our ferroalloys segment comprises:

• Southern Urals Nickel Plant,
• Bratsk Ferroalloys Plant,
• Tikhvin Smelting Plant,
• Voskhod Mining Plant (produces chromite ore concentrate, located in Kazakhstan).

Nickel production at Southern Urals Nickel Plant is sourced with ore from two own nickel open-pit mines, Sakharinsky and Buruktalsky. In 2008 the plant produced 16 thousand tonnes of nickel in ferronickel. The whole amount of the output not consumed by Mechel’s plants is exported.

Bratsk Ferroalloy Plant is a modern high-performance facility producing ferrosilicon with high (65% and 75%) silicon content. In 2008 the plant’s output exceeded 91 thousand tonnes which makes 15% of total ferrosilicon production in Russia. To ensure own source of raw materials for the plant, a license for Uvatskoe quartzite deposit development was acquired on May 2008. Proven reserves of the deposit amount to about 7 million tonnes; however, available estimates indicate that total probable reserves of the deposit may reach almost 120 million tonnes. Mechel plans to build a mining plant there with annual capacity of 400 thousand tonnes of ore.

After Oriel Resources’ acquisition in April 2008 Tikhvin Smelting Plant (Leningradskaya Region), Shevchenko Nickel Deposit (Kazakhstan) and Voskhod Chrome Deposit entered Mechel Group’s structure.

Tikhvin Smelting Plant’s production capacity is 140 thousand tonnes of high-carbon ferrochrome per annum.

On September 2008 Mechel commissioned its new chrome-mining Voskhod Mining Plant subsidiary in Kazakhstan. The plant’s production capacity is above 900 thousand tonnes of chromite concentrate.

The plants of Mechel’s ferroalloys segment are subsidiaries of Oriel Resources Ltd., Mechel OAO being its sole shareholder.

In 2008 Mechel’s ferroalloys plants produced 16 thousand tonnes of nickel, 91 thousand tonnes of ferrosilicon, and 58 thousand tonnes of ferrochrome (ferrochrome data presented for Q2-Q4 2008).

POWER SEGMENT

Our power segment includes two generating assets and a power sales company. Heat and power generating activities are intended both to meet Mechel Group’s internal demand and to contribute to free market sales.

Mechel power segment comprises:

• Southern Kuzbass Power Plant,
• Toplofikatsia Rousse power plant, 
• Kuzbass Power Sales Company.

In 2008 Mechel power segment’s subsidiaries produced more then 4 billion MW of electric power and 6 billion Gcal of heat power.

Our ferroalloy, mining, energy and steel facilities are composed in a unified vertical integrated production complex. Production structures involving well-balanced production chain and own raw material base are more economically effective and less depend on market fluctuations.