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Mechel Mining Subsidiaries Increase Capacity Utilization

07/22/2009 - Mechel OAO announces an increase in the level of utilization for its mining subsidiaries’ production capacities in July 2009.

Mechel OAO has increased the level of utilization of its mining subsidiaries’ production capacities in July 2009.
 
Utilization of production capacities of Mechel’s coal mining assets has reached 63% in July 2009 as compared to the respective average indicator in January to August 2008.
 
The company said that utilization of its Korshunov Mining Plant OAO iron ore concentrate producing subsidiary had surpassed 108% level. Production capacity utilization of the company’s Southern Kuzbass and Yakutugol coal mining subsidiaries has increased by 62% and 57%, respectively, in July 2009 as compared to May 2009.
 
“The witnessed recovery of production in Russia’s steel industry contributes to the increase in the domestic consumption of raw materials,” commented Mechel OAO Senior Vice President Vladimir Polin. “Besides, we have managed to conclude a number of major export long-term contracts with Chinese, Japanese, and South Korean companies in the first half of 2009, which enabled us to significantly increase utilization of our coking coal production capacities already in the second quarter 2009 and start their recovery to the pre-crisis level.
 
“Thanks to the new coal and iron ore concentrate domestic and export sales contracts, all Mechel’s mining subsidiaries are currently secured with orders,” continued Polin. “That allowed us to increase overburden operations volume at the open pit mines of Mechel’s coal mining assets, which was decreased in the 4th quarter of 2008 in order to reduce our production costs. According to our plans, that will enable us to ramp up our coal mining subsidiaries’ output to 70%-75% of the pre-crisis level already in September 2009,” he added.