EUROPEAN COMMISSION HAS COMPLETED MONITORING OF MECHEL’S STEEL SUBSIDIARIES IN
ROMANIA
Moscow, Russia – September 22, 2010 – Mechel OAO (NYSE: MTL), one of the leading
Russian mining and metals companies, reports compliance of its Romanian steel
subsidiaries with the viability benchmarks established by the European
Commission within the framework of the Romanian steel industry restructuring
strategy.
The European Commission monitored Mechel Targoviste and Mechel Campia Turzii in
the period from 2004 to 2008, as soon as state aid was granted for both plants
in the course of privatization. The state aid was provided in the way of
writing-off the plant’s historical debts. The Commission monitored certain
parameters of the companies’ activity, including: labour efficiency increase,
reduction of materials consumption, manpower optimization, modernization of
production facilities, and compliance with the EU environmental standards.
The European Commission’s final report has confirmed compliance of Mechel
Targoviste and Mechel Campia Turzii with all the key benchmarks required.
Andrey Deineko, Chief Executive Officer of Mechel-Steel Management OOO,
commented on the event:
“The European Commission confirmed our Romanian subsidiaries’ compliance with
the key restructuring benchmarks and this means that we would not have to pay
back the state aid that had been granted to us during the privatization period.
Thus, we may say about high efficiency of our Romanian subsidiaries’ development
strategy. The company invested over US$100 million in Mechel Targoviste and
Mechel Campia Turzii between 2004 and 2008 which is 1.5 times above the level of
investments specified by the EU. Owing to the crisis the subsidiaries’
performance in 2008 was worse than we had expected. We plan to reach the
pre-crisis production levels by the end of 2010. We shall also continue our
started modernization programme, the main aim of which is new technologies
implementation in steel-smelting and rolled products sectors and increase in
output of high value added products.”
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Mechel OAO
Ekaterina Videman
Tel: + 7 495 221 88 88
ekaterina.videman@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, ferrochrome, ferrosilicon, rolled products,
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.