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Mechel Announces Commissioning of New Drilling Units at Its Southern Urals Nickel Plant OAO Subsidiary

Friday, September 28th, 2007

Mechel OAO, one of the leading Russian mining and metals companies, announces it has commissioned new self-propelled drilling rigs at the open pit mines of its subsidiary, Southern Urals Nickel Plant OAO. Commissioning of the new equipment will enable Mechel to increase nickel ore mining efficiency while reducing production costs.
The new Russian-made self-propelled drilling rig, UKB-5S, was commissioned at the Sakharinsk open pit mine at the Southern Urals Nickel Plant OAO this month. A similar unit was delivered to the Buruktal open pit mine administration last week.
The cost of commissioning two UKB-5S drilling rigs was more than RUR12.0 million (approximately US$480 thousand). The designed capacity of each unit is approximately 400 running meters per month.
The acquisition of the drilling rigs will allow the plant to carry out independent operational exploration while obtaining data for reliable planning and managing quality of mined silicate-nickel ore. The new equipment will help the miners define more precise boundaries of ore bodies, volumes and quality of mineral reserves.
The commissioning of the new self-propelled drilling rigs was implemented in line with Mechel’s mining subsidiaries technical re-equipment program. Mechel OAO intends to invest approximately US$1.2 billion in its mining segment during 5 years.

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