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July 15, 2008

MMK signed a Strategic Partnership Memorandum with the Czech Company ALTA for the Prioskolsky Mining and Processing Plant project

Victor Rashnikov, Chairman of the OJSC MMK Board of Directors, and Vladimir Plašil, Chairman of the Board of Directors of ALTA, s.a. (Czech Republic) ("ALTA"), signed a Memorandum on Strategic Partnership aimed at organizing mutually advantageous cooperation and coordination of the parties' actions for the implementation of the Prioskolsky Mining and Processing Plant ("Prioskolsky GOK") in the Belgorod Region of the Russian Federation.
According to the Memorandum, ALTA will be the general contractor for the construction of the Prioskolsky GOK, and will propose a scheme for the project's financing. ALTA already has positive experience in the implementation of similar projects in the mining and other industries with the use of long-term financing on preferential conditions.
Alongside the Memorandum, a EUR 200 m framework contract was signed for ALTA's delivery of process equipment and services for preparatory work and stripping at the Prioskolsky Iron Ore Deposit.
The signing ceremony in the Hrzansky Palace in Prague was attended by Mirek Topolanek, Prime Minister of the Czech Republic, Martin Rziman, Czech Minister of Industry and Trade.
The Czech Republic's ECA EGAP, the Czech Export Bank and commercial banks showed an interest in financing OJSC MMK's projects.
"The selection of a strategic partner for the construction of the Prioskolsky GOK is another step in the consistent implementation of OJSC MMK's strategy aimed at expanding our Company's own raw materials supply base", Mr. Rashnikov said, commenting on the signing of the documents.
In November of 2006 OJSC MMK won in the bid for the right to develop the Prioskolsky Iron Ore Deposit (located within the Kursk Magnetic Anomaly) with reserves of over 2 bn tons. In January of 2008 OJSC MMK set up a branch for the implementation of the project in the Belgorod Region and signed an engineering contract with TsentrGiproRuda Design Institute.
When completed, the Belgorod Region project will allow MMK to cover its needs for iron ore materials for a period of over 60 years. It is expected that the construction of the plant's infrastructure will start as soon as 2009, with the first ore expected to be mined in 2012. In 2016 the plant is scheduled to reach its design capacity of 25 m tons of iron ore, which, coupled with output from the local Magnitogorsk mine, will meet 80% of MMK's requirement for this kind of raw materials.

Additional Information on MMK:
The Magnitogorsk Iron and Steel Works OJSC ranks 20th among the world's largest steel producers and is one of the leaders of Russia's steel industry.
The Company is a large steel producing complex encompassing the entire production chain, from preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of value added goods.
In 2007 the Company produced 13.3 m tonnes of crude steel, and 12.2 m tonnes of commercial products. Sales under US GAAP amounted to USD 8.2 bn, with net profit standing at USD 1.8 bn.

Additional Informationon ALTA:
ALTA, s.a., is a leading supplier of process equipment for the energy, machine tools and mining sectors. As a general contractor, ALTA provides a broad range of services in marketing, design, engineering and finances. Its activity is mainly focused on Russia and other CIS countries. In these regions the company specializes in exporting machine tools and metal-working equipment, technology for mining and processing mineral resources and technology and equipment for the manufacturing of construction materials. Its import operations are focused on supplying large quantities of iron ore materials, steam coal and fuel for the steel –making and energy sectors.




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