Moscow, Russia – January 12, 2010 – Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces successful implementation of annual development plan of its sales and service network Mechel Service OOO.

In May, 2009 in line with the strategy of its own production and warehousing facilities development Mechel Service launched production of welded mesh in Moscow region. Starting from autumn 2009 the company reached its production capacity of 700 tonnes of welded mesh per month. Currently welded mesh is mainly consumed by construction companies in Moscow, Moscow region, and the south of Russia. Mechel Service intends to extend its supplies to customers in the North-Western region.

One of Mechel Service’s priority tasks in 2009 was establishing new sales directions. In addition to the in-house welded mesh, Mechel Service’s product portfolio now includes B500C cold-deformed reinforcement and pipe rolled products. Moreover, a significant increase in hardware and structural shapes sales allowed Mechel Service to extend its market share, though overall decline in demand for metal products was witnessed in this period.

In the meantime, in 2009 Mechel Service paid dominant attention to quality improvement and further expansion of services portfolio for its end customers. In addition to the in-house production, Mechel Service established its own cargo fleet which allowed to reach a new level in services quality. At the end of November 2009 Mechel Service purchased five new cars for operation in Moscow region. Its own cargo fleet allows Mechel Service to significantly optimize timelines in steel products supplies for customers in the Central Region of Russia. In 2010 the fleet expansion is planned for operation in Moscow, Krasnodar, Yekaterinburg, Saint-Petersburg, and Novosibirsk.

In 2009 Mechel Service regional network was continually expanding. New branches were opened in Penza, Lipetsk, Guryevsk, and Engels. No significant changes happened in Mechel Service’s branches network structure. Its general strategy provided for enlarging of its operating facilities and extension of production and warehousing facilities in the regions of operation. Over 50 units of Mechel Service are successfully operating in Russia, most of them are equipped with working machines for reinforcement cutting and straitening and rope unwinding. In 2010 it is planned to increase volumes of steel products processing also due to purchasing of new equipment.

Senior Vice President of Mechel OAO Vladimir Polin commented on results for 2009: “Thanks to the quality development and expansion of the branch network in the regions of Mechel Service’s operation in 2009 we managed to secure sales volumes at the pre-crisis level and even to enlarge our market share in certain directions. Stable marketing allowed us to maintain high capacity utilization level at Mechel’s enterprises and to response to the market needs promptly. Thus, our well-balanced in-house system for direct sales to end customers proved to be beneficial.”