Mechel reports successful installation of new electric furnace at Bratsk Ferroalloy Plant

Mechel, one of the leading Russian mining and metals companies, announces that a ferroalloy electric furnace was installed and the first smelting of ferrosilicon conducted as part of modernization of Bratsk Ferroalloy Plant of the group’s ferroalloys division.

This is the first ferroalloy electric furnace to be installed as part of the contract between Bratsk Ferroalloy Plant and Sibir Electrothermal Equipment Plant OAO to supply four ferroalloy electric furnaces with the capacity of 33 MVA each to replace the existing furnaces with the capacity of 25 MVA, and to supervise installation and commissioning works.

Bratsk Ferroalloy Plant’s reconstruction began in late 2010 and will be completed in 2013. After the new furnaces are commissioned, Bratsk Ferroalloy Plant’s production capacity will increase by 30% and its power consumption will be reduced by 10-13%.

Investment in the project topped 1.9 billion rubles (65 million US dollars*). Reconstruction measures preserve the plant’s entire existing infrastructure which enables the plant to substantially cut costs and save time in implementing the project.

Technical revamping of ferrosilicon production includes reconstruction of the raw materials dosage system and expansion of storage space for finished products.

Mechel Ferroalloys Management OOO’s Chief Executive Officer Gennady Ovchinnikov noted: “Successful installation and launch of the new electric furnace confirm that the path we chose to modernize production is right and will substantially improve Bratsk Ferroalloy Plant’s efficiency. Thanks to state-of-the-art technologies, the plant will also be able to cut its electricity expenses.”

* Based upon the Russian Central Bank exchange rate of 29.22 RUR/$ as of March 20, 2012.