Mechel Announces Operational Results for 2009

Vladimir Polin, Senior Vice-President of Mechel OAO, commented on 2009 operational results, “In late 2008 and early 2009 mining and metals companies suffered substantially from the global economic crisis. However, we made necessary changes and corrections in our operation system and achieved maximum efficiency in each sector of our work.
If we compare results of Q4 2008 witnessing the crisis’ crucial moment and the results of Q4 2009, dynamics of our production volumes recovery would become obvious. We increased our coking coal concentrate production by 42%, nickel production – by 112%, ferrochromium production – by 199%, steel production – by 31%, coke production – by 58%, rolled products production – by 36%, hardware production – by 45%, and electric power generation – by 23%.
Today we still see steady growth of demand for many of our products. Thus, in Q4 2009 our steel division showed higher production of coke, pig iron, steel, rolled products, forgings and stampings. On the whole, in our steel division capacity utilization rates reached 100% as compared to the pre-crisis level. Output volumes at some of our plants, such as Chelyabinsk Metallurgical Plant are currently even higher than they were before the crisis. Our steel plants also started production of new products which are highly demanded on the market.
Our ferroalloy division demonstrated substantial increase of production of ferrosilicon and ferrochromium. All of our ferroalloy facilities have enough orders; capacities of the plants are completely loaded.
Rapid growth in electric power generation volume is a result of increase in efficiency and reliability of our Southern Kuzbass Power Plant equipment where we have completed planned repairs.
In H2 2009 we boosted production in our mining segment which saw the hardest attack of the global recession. In spite of seasonality effect, the growth rate continued well into Q4 2009. This process will be completed in 2010 when production volumes at our mining facilities will recover to the pre-crisis level. Moreover, acquisition of Bluestone coal assets by Mechel will allow us to even exceed these figures.
On the whole, we may say that during the past year we gained invaluable experience helping us not only to cope with the decrease of production volumes caused by the crisis but also ensure a foundation for further growth of the company’s operational performance”.