Moscow, Russia – December 17, 2007 – Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces that the Company has acquired 49% of the shares of Toplofikatsia Rousse JSC (TPP “Rousse”), located in Rousse, Republic of Bulgaria. The acquisition is in line with Mechel’s plans to develop the substantive power segment within the company’s diversified business and enter new markets for its steam coal.

The “Rousse” power plant is located at the bank of Danube, in close proximity to the harbor of Rousse. The installed electric power potential capacity of the “Rousse” plant's generators is 400 MW and it has total heat capacity of 35 Gcal/h and a staff of more than 700 employees. At this moment, only some of the plant’s generators are producing electric power. Currently, the plant generates electric power of 290 MW. To achieve its full-scale electric power generation capacity of 400 MW, part of the installed equipment at the Rousse power plant will need to be modernized.

On December 14, 2007, following the approval by the Post-Privatization Control Agency of Bulgaria and Antimonopoly Committee of Bulgaria of Mechel’s right to acquire 49% of the shares of TPP “Rousse”, the company’s subsidiary, Mechel International Holdings, acquired 49% of the shares of TPP “Rousse” from its 100% owner, Holding Slovenske elektrarne d.o.o (HSE) of Slovenia. The transaction amount was approximately EUR50.2 million.

Mechel OAO Chief Operating Officer Alexey Ivanushkin commented on the transaction, “Mechel is the first Russian company to make significant investments in a power generating asset in Europe, a significant step that confirms Mechel’s intentions to continue developing its power segment. Due to a natural gas deficit and rising prices for energy resources, there is significant opportunity for steam coal consumption in Eastern Europe. As such, coal fired power plants are becoming more important. At a time of tight steam coal supply, Mechel’s becoming a shareholder of the “Rousse” power plant secures the stability of coal deliveries to and the vitality of the power plant itself. In addition, the acquisition of a large stake in a power plant in Bulgaria opens new markets for us to sell our steam coal and new potential markets for selling electric and heat energy produced by TPP “Rousse” to third parties. We are also interested in further expanding our presence in the growing Bulgarian energy market. This transaction highlights a distinguishing feature and competitive advantage of Mechel’s ongoing commercial operations strategy; its direct work with end users, without any brokers. Such a balanced approach to its production and sales chain will enable Mechel to further reduce its costs, improve power generation efficiency, and driver greater profits for our shareholders.”