Mechel announces the commissioning of the 2nd line of the new sinter plant at Chelyabinsk Metallurgical PlantMoscow, Russia – September 6, 2005 – Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces the startup of the second line of the new sinter plant at its subsidiary, Chelyabinsk Metallurgical Plant.
Construction of the new sinter plant is in line with Mechel’s strategic investment program, targeted at improving quality, lowering production costs and overall modernization. The plant will have a total annual capacity of 4.5 million tonnes of sinter once it is brought fully on line, which is expected by the end of this year.
The sinter plant will have four production lines, each line with a capacity of 1,125 million tones. The full commissioning of the new plant is scheduled to happen before the end of the year. The first line was brought to operation this April.
The project will significantly increase Mechel’s ability to internally source its iron ore requirements for its own iron ore mine, Korshunov Mining Plant. The sinter plant, once fully commissioned, is expected to yield cost savings of approximately $70 million annually. The total cost of the project is expected to be approximately $150 million.
“Construction of the new sinter plant will boost further integration of our operating subsidiaries thus increasing the synergetic effect and minimizing the impact of the situation on the metallurgical raw market”, - Mechel’s CEO, Vladimir Iorich, said.
Director of Communications
Mechel is one of the leading Russian mining and metals companies. Mechel unites producers of coal, iron ore, nickel, steel, rolled products, and hardware. Mechel products are marketed domestically and internationally.
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.