Moscow, Russia – November 11, 2004 – Mechel, a Russian metals and mining company, announced today that its subsidiary, Southern Kuzbass Coal Company, has won an auction to develop a coking coal mine in the Sibirginskaya Mine area in the Kuzbass region of Russia.

According to a decision of the auction committee, Mechel will receive a license through its subsidiary, Southern Kuzbass OAO, for the use of reserves of the Sibirginskaya mine area of the Sibirginsky and Tomsky coking coal deposits. The coal reserves of the license area are estimated at approximately 65 million tonnes, based on Russian standards for reserve evaluation. The auction conditions require a minimum of 1.4 million tonnes of extraction annually during the first stage of development, and 2.4 million tonnes of extraction annually during the second stage of development. The license will be valid for 20 years.

“The development of our mining segment, and the development of coking coal mining in particular, is one of the priorities of Mechel’s strategy. The fact that we received this important license to develop a new coal area adjacent to our existing areas will strengthen our position in the market for raw materials for the production of steel,” Mechel’s CEO, Vladimir Iorich, said, commenting on the results of the auction.

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Mechel Steel Group OAO
Irina Ostryakova
Director of Communications
Phone: 7-095-258-18-28
Fax: 7-095-258-18-38
irina.ostryakova@mechel.com

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Mechel Steel Group is a Russian metals and mining company, uniting producers of steel, rolled products, hardware, coal, iron ore concentrate, and nickel. Mechel Steel Group 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 Steel Group, 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 Steel Group files from time to time with the U.S. Securities and Exchange Commission, including our Form F-1. 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 F-1, 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.