Mechel Prices Its Initial Public Offering

Mechel Prices Its Initial Public Offering

Russian Metals and Mining Company Enters International Equity Markets
Moscow, Russia – October 29, 2004 – Mechel Steel Group OAO (NYSE: MTL), a Russian metals and mining company, announced today the pricing of its Initial Public Offering of 13,875,691 American Depositary Shares (ADSs), each representing three shares of Mechel’s common shares, at an offer price to the public of US$21 per ADS.

Of the ADSs offered, 11,100,553 were sold by the company and 2,775,138 by its core shareholders, in total representing 10% of Mechel's equity on a post-issuance basis.

The Sole Global Coordinator and Sole Bookrunner for the offering is UBS Limited and the Co-Lead Managers of the offering are J.P. Morgan Securities Ltd. and Morgan Stanley & Co. International Limited. The Co-Manager for the offering is Troika Dialog (Bermuda) Ltd. A copy of the prospectus is available from UBS Securities LLC, 299 Park Ave., 25th Floor – Prospectus Dept., New York, NY 10171.

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Irina Ostryakova,
Director of External Communications
Phone: 7-095-258 1828
Fax: 7-095-258-1838
irina.ostryakova@mechel.com

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Mechel is a Russian metals and mining company, uniting producers of steel, rolled products, hardware, coal, iron ore concentrate, and nickel. Mechel products are marketed domestically and internationally.

This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the “Order”) or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as “relevant persons”). The ADSs are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such ADSs will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. Stabilization/FSA.

This press release is not a public offer or advertisement of securities in the Russian Federation, and is not an offer, or an invitation to make offers, to purchase any securities in the Russian Federation.

29.10.2004