MECHEL ANNOUNCES OLZHERASSKAYA MINE COMMISSIONING

[Steelonthenet.com] Moscow, Russia - Mechel OAO (NYSE: MTL) announces the commissioning of the Olzherasskaya Mine, a part of the Southern Kuzbass coal company.

The mine has been commissioned in line with Mechel's previously announced strategy of further developing its mining segment and increasing coal production to 25 million tonnes by 2010. Commissioning of the Olzherasskaya Mine will allow Southern Kuzbass OAO to increase its coal output by 1.8 million tonnes in 2007. The new mine's annual capacity is 3.0 million tonnes, and production will reach this level in 2010. The company invested $100 million in the mine's construction.

The new mine is equipped with modern mining machinery. The mine's development ends are worked up by high-capacity roadheaders, and coal is extracted with a powered mining complex using the sub-level caving method that enables thick seam mining in one layer. Southern Kuzbass will become the first company in Russia to employ modern mining complex of this kind.

Special attention was also paid to operational safety. Along with advanced mining equipment, special surface machinery was installed that provides for degasification in the extraction area, and for prevention of spontaneous coal combustion.

The reserves of the Olzherasskaya Mine are 160 million tonnes of coking coal. Of this volume, 150 million tonnes are concentrated in the Razvedochny Plot of the Raspadsky Coal Deposit. The license to develop this deposit was acquired by Southern Kuzbass for $15.5 million at an open auction in June 2005. The coal will be shipped abroad, mainly to Asian and West European countries, as well as sold domestically.

'Mechel is entering the stage of active development of the license areas acquired at auctions in 2004-2005. Commissioning of the new mine in Southern Kuzbass will not only raise our performance indicators in coal production, but also set the pace for implementation of the entire program of the priority development of Mechel's mining segment' said Mechel's Chief Operating Officer Alexey Ivanushkin earlier today.

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