Friday, September 19, 2008

Mechel Announces the Installation of New Equipment at Its Southern Urals Nickel Plant OAO Subsidiary

Orsk, Russia – September 18, 2008 – Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces that it has upgraded the machine tool equipment base at its Southern Urals Nickel Plant OAO subsidiary.

A new large lathe RT-117-5, valued at approximately RUR6.0 million ($240.0 thousand), has been installed in the Casting and Mechanical Workshop of Southern Urals Nickel Plant OAO. Among other tasks, the universal lathe is designed to manufacture and renovate shafts of up to 5 meters in length and crane wheels, process the rotors of sinter machines, and manufacture sinter cutting knives. In the process of installing the 16-tonne machine in the workshop aisle, the lathe was, first disassembled, transported to the site, and then re-assembled again at the prepared site by the plant’s specialists.

Operation of the lathe will enable the Casting and Mechanical Workshop to extend the variety of long-length components it currently machines and cut production costs by reducing outsourcing the production of such components to third parties. Ultimately, the workshop plans to also replace its Skoda boring machine and its vertical milling machine, which have reached the end of their service lives.

In line with the plant’s program to upgrade the equipment in its auxiliary shops, an 8-tonne telpher to be used in overall repairs of the main processing equipment and a sling testing jig required to arrange a section for sling manufacturing have been purchased for the Casting and Mechanical Workshop.

Mechel OAO’s capital expenditure program provides for investing approximately US$350.0 million in development of its Southern Urals Nickel Plant OAO subsidiary until 2012.

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