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Mechel OAO

Friday, February 22nd, 2008

Mechel OAO, one of the leading Russian mining and metals companies, announces that it has signed a contract and is starting construction of a railway spur track to the Elga coal deposit (Yakutia).
The contract for designing and constructing the railway spur track to connect Ulak railroad station of the Baikal-Amur Mainline with the Elga coal deposit (Yakutia) was signed between Mechel and Transstroy Engineering Corporation, a subsidiary of Transstroy Design and Construction Company, on February 19.
The total length of the railroad will be approximately 315 kilometers. The railroad’s design comprises about 420 engineering structures, including 194 bridges. The railroad’s throughput capacity after completion of all construction stages will be 25.0 million tonnes annually.
Construction of the railroad is the first stage in the development of the Elga deposit, from which annual coal output is planned to reach about 30.0 million tonnes. Commissioning of the railroad for permanent operations will take place not later than September 30, 2010.
“This project is a key aspect of our plans to develop the promising Elga coal deposit, and is consistent with the implementation of Mechel’s strategic program aimed at further growing its mining segment. The construction will be carried out in three phases. Concurrently with the railroad construction, development of the Elga deposit itself will start. This will enable Mechel to ensure the possibility to transport coal from the deposit simultaneously with the completion of the railroad Phase 1,” Mechel Management OOO Chief Executive Officer Vladimir Polin commented.

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