MMK.L Regulatory News (MMK)

Open Joint Stock Company

Magnitogorsk Iron and Steel Works

Press Release

March 09, 2011 Iskenderun, Turkey

MMK-Atakas commissions electric arc furnace facility

MMM-Atakas, a joint venture of OJSC Magnitogorsk Iron & Steel Works (MMK) and Atakas Group, commissioned an electric arc furnace facility at the industrial complex in Iskenderun (Turkey) today in the presence of the Prime Minister of the Turkish Republic Recep Tayyip Erdoğan.

Commissioning of the facility practically means that construction of the MMK-Atakas metallurgy plant on the Iskenderun site has been completed. It is planned that production will reach over 800,000 tons of steel products as soon as in 2011 and will exceed 2 mln tons in 2012. The full capacity of the plant is 2.3 mln tons of metal products per year.

The decision to build the plant was made back in May 2007. In July 2007, MMK became the owner of 50 percent plus one share of MMK ATAKAS METALURJI SANAYI, TICARET VE LIMAN ISLETMECILIGI A.S. also known as MMK-Atakas. The Turkish Atakas Group owns 50 percent minus one share of the company.

At present, the plant includes the cold-rolling mill, galvanizing and color coating lines and two service centers - in Iskenderun and Istanbul. The centers are designed to cut and slit coils and sheets and package the products. To supply raw and input materials to the Iskenderun plant and ship MMK-Atakas products to customers a sea port capable of catering ships of up to 100,000 dwt was built next to the production site. The total investments in the MMK-Atakas project are estimated at approximately $2.1 bn. The project is financed by the shareholders' funds as well as borrowed capital. The key equipment supplier for the project is the Italian Danieli company.

Victor Rashnikov, MMK Chairman of the board, stated: "MMK-Atakas will solve the problem of flat rolled products shortage on the Turkish domestic market." Rashnikov also said he was "convinced that MMK-Atakas will considerably contribute to further strengthening economic and business contacts between Russia and Turkey."Recep Atakas, Chairman of the Board of Atakas Group, emphasized that "Metal consumption market in Turkey, developing quite dynamically in the recent years, really needed such a manufacturer as MMK-Atakas."

About MMKOpen Joint Stock Company MMK is among the world's largest steel producers and is one of the leaders of Russia's steel industry. The company's operations in Russia include a large steel producing complex encompassing the entire production chain, from preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of higher value added products. In 2010 the MMK Group produced 11.4 mln tons of crude steel and 10.4 mln tons of commercial steel products

About Atakas Group of CompaniesAtakas Group owns and operates sieving and packing facilities with an annual capacity of 2 million tons located in Iskenderun, Marmara, and Black Sea regions. The Group also owns two factories for production of pressed coals with an annual production capacity of 500.000 tons located in Payas Organized Industrial Zone and Gebze Organized Industrial ZoneMMK Communications Department.