MECHEL REPORTS HALTING PRODUCTION AT SOUTHERN URALS NICKEL PLANT

Moscow, Russia — December 19, 2012 – Mechel OAO (NYSE: MTL), one of the leading
Russian mining and metals companies, reports halting production at Southern
Urals Nickel Plant OAO.
Considering persistent negative trends on global nickel market and unfavorable
forecasts for its recovery in the foreseeable future, the plant’s Board of
Directors decided to halt production at the plant for the long term and to
prepare its equipment for a long-term shutdown in order to minimize the plant’s
losses. All requisite procedures set forth by the Russian Federation’s law will
be observed.
Southern Urals Nickel Plant OAO will provide its laid-off employees not only
those measures required by the labor law and the collective labor agreement, but
also guarantees set by the multilateral agreement between the Orenburg Region’s
government, Orsk’s city administration, Mechel OAO and the plant’s management
and trade union. In particular, the plant’s employees will be offered up to
1,500 jobs at Mechel Group’s enterprises, including its newest production
facilities that are currently being commissioned. The document was signed with
the participation of the Russian Industry and Trade Ministry’s workgroup.
“The decision to halt production was dictated by a long period of negative
financial results caused by the current situation on the nickel market, and
aimed at minimizing losses. In this situation we are forced to react to this
economic challenge and act in the best interests of all of Mechel OAO’s
shareholders. It must be noted that Southern Urals Nickel Plant OAO is planned
for divestment according to the asset restructuring program earlier approved by
the company’s Board of Directors, and we continue to actively seek investors.
All of the plant’s equipment will be properly prepared for a long-term shutdown,
so that the new owner would be able to resume production in acceptable time and
with minimal loss,” Mechel OAO’s Chief Executive Officer Evgeny Mikhel commented
on the decision made by the plant’s Board of Directors.
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Mechel OAO
Pavel Taran
Tel: +7 495 221-88-88
pavel.taran@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, ferrochrome, ferrosilicon, steel, 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.