MECHEL ANNOUNCES RESULTS OF ITS SALES NETWORK MECHEL SERVICE OOO’S DEVELOPMENT
IN 2009

Moscow, Russia – January 12, 2010 – Mechel OAO (NYSE: MTL), one of the leading
Russian mining and metals companies, announces successful implementation of
annual development plan of its sales and service network Mechel Service OOO.
In May, 2009 in line with the strategy of its own production and warehousing
facilities development Mechel Service launched production of welded mesh in
Moscow region. Starting from autumn 2009 the company reached its production
capacity of 700 tonnes of welded mesh per month. Currently welded mesh is mainly
consumed by construction companies in Moscow, Moscow region, and the south of
Russia. Mechel Service intends to extend its supplies to customers in the
North-Western region.
One of Mechel Service’s priority tasks in 2009 was establishing new sales
directions. In addition to the in-house welded mesh, Mechel Service’s product
portfolio now includes B500C cold-deformed reinforcement and pipe rolled
products. Moreover, a significant increase in hardware and structural shapes
sales allowed Mechel Service to extend its market share, though overall decline
in demand for metal products was witnessed in this period.
In the meantime, in 2009 Mechel Service paid dominant attention to quality
improvement and further expansion of services portfolio for its end customers.
In addition to the in-house production, Mechel Service established its own cargo
fleet which allowed to reach a new level in services quality. At the end of
November 2009 Mechel Service purchased five new cars for operation in Moscow
region. Its own cargo fleet allows Mechel Service to significantly optimize
timelines in steel products supplies for customers in the Central Region of
Russia. In 2010 the fleet expansion is planned for operation in Moscow,
Krasnodar, Yekaterinburg, Saint-Petersburg, and Novosibirsk.
In 2009 Mechel Service regional network was continually expanding. New branches
were opened in Penza, Lipetsk, Guryevsk, and Engels. No significant changes
happened in Mechel Service’s branches network structure. Its general strategy
provided for enlarging of its operating facilities and extension of production
and warehousing facilities in the regions of operation. Over 50 units of Mechel
Service are successfully operating in Russia, most of them are equipped with
working machines for reinforcement cutting and straitening and rope unwinding.
In 2010 it is planned to increase volumes of steel products processing also due
to purchasing of new equipment.
Senior Vice President of Mechel OAO Vladimir Polin commented on results for
2009: “Thanks to the quality development and expansion of the branch network in
the regions of Mechel Service’s operation in 2009 we managed to secure sales
volumes at the pre-crisis level and even to enlarge our market share in certain
directions. Stable marketing allowed us to maintain high capacity utilization
level at Mechel’s enterprises and to response to the market needs promptly.
Thus, our well-balanced in-house system for direct sales to end customers proved
to be beneficial.”
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Mechel OAO
Ilya Zhitomirsky
Phone: + 7 495 221 88 88
ilya.zhitomirsky@mechel.com
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Mechel is one of the leading Russian companies. Its business includes four
segments: mining, steel, ferroalloy, and power. Mechel unites producers of coal,
iron ore concentrate, nickel, steel, rolled products, ferroalloys, hardware,
heat and electric power. Mechel products are marketed domestically and
internationally.
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Some of the information in this press release may contain projections or other
forward-looking statements regarding future events or the future financial
performance of Mechel, as defined in the safe harbor provisions of the U.S.
Private Securities Litigation Reform Act of 1995. We wish to caution you that
these statements are only predictions and that actual events or results may
differ materially. We do not intend to update these statements. We refer you to
the documents Mechel files from time to time with the U.S. Securities and
Exchange Commission, including our Form 20-F. These documents contain and
identify important factors, including those contained in the section captioned
“Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in our
Form 20-F, that could cause the actual results to differ materially from those
contained in our projections or forward-looking statements, including, among
others, the achievement of anticipated levels of profitability, growth, cost and
synergy of our recent acquisitions, the impact of competitive pricing, the
ability to obtain necessary regulatory approvals and licenses, the impact of
developments in the Russian economic, political and legal environment,
volatility in stock markets or in the price of our shares or ADRs, financial
risk management and the impact of general business and global economic
conditions.