MECHEL OAO ANNOUNCES SIGNING COOPERATION AGREEMENT WITH FGC UES AND RUSHYDRO

Moscow, Russia – August  27, 2010 – Mechel OAO (NYSE: MTL), one of the leading
Russian mining and steel companies, announces signing a cooperation agreement
with JSC Federal Grid Company of Unified Energy System (FGC UES) and JSC
RusHydro (RusHydro), which regulates the parties’ cooperation while implementing
investment projects on construction of Nizhne-Bureisk hydro power plant (HPP)
and Elga coal mining complex.
On August 27, 2010 Mechel, FGC UES and RusHydro signed the cooperation agreement
which regulates the parties’ cooperation while implementing investment projects
on construction of Nizhne-Bureisk HPP and Elga coal mining complex. Igor Zyuzin,
Mechel’s Chairman of the Board of Directors, Evgeny Dod, Chairman of the
Management Board of RusHydro, and Oleg Budargin, Chairman of the Management
Board of FGC UES, signed this document.
According to this agreement RusHydro will construct Nizhne-Bureisk HPP as well
as develop power generation schemes. Mechel OAO will commission power receivers
for Elga coal mining complex. FGC UES in its turn will construct external power
supply facilities of Elga coal mining complex as well as provide power schemes
of Nizhne-Bureisk HPP.
In January 2010 FGC UES, Mechel OAO and System Operator UES OAO approved the
external power supply scheme for Elga coal complex. The construction of the
external power supply facilities will start in 2011 and have two stages. Within
the 1st stage, by 2013 FGC UES will reconstruct the 220kW Prizeiskaya
substation, build three new 220kW substations and 270 km long 220kW power
transmission line Prizeiskaya – Elgaugol in Amursk region. By 2015 the extension
of the 220kW power distributing gear at Prizeiskaya substation will be
completed. The 2nd 220kW power transmission line Prizeiskaya – Elgaugol and the
2nd 125 MVA autotransformer at 220kW Elgaugol substation will be constructed by
that time as well.
Construction of power facilities for Elga coal mining complex is included into
the draft of FGC UES investment program for 2010-2014, which is submitted for
approval to the Ministry of Energy of the Russian Federation.
Elga coal deposit is the largest coking coal deposit in Russia. It is located at
the South-Eastern part of Yakutiya, 415 km to the East from Neryungri City and
300 km from Baikal-Amur railway. Estimated balance coal reserves amount to 2.2
billion tonnes.

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Mechel OAO
Ekaterina Videman
Tel: + 7 495 221 88 88
ekaterina.videman@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, steel, ferrochrome, ferrosilicon, 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.