MMK.L Regulatory News (MMK)

Open Joint Stock Company

Magnitogorsk Iron and Steel Works

Press Release

November 22, 2010 St. Petersburg, Russia

Magnitogorsk Iron & Steel Works, OJSC, (MMK), commissioned first stage of its metal service center and stamped components facility in St. Petersburg

Closed Joint Stock Company Intercos-IV, a division of MMK Group of Companies, commissioned the first stage of MMK-Intercos service center and stamped components plant in St. Petersburg today. The official ceremony of the launch was attended by the Russian Prime Minister Valdimir Putin and the Governor of St. Petersburg Valentina Matviyenko.

4.018 bn rubles invested in the commissioning will materialize in over 250,000 mtpy of ready-made metal products. Consnstruction of the project's second stage is expected to start in 2011.

Intercos-IV output is designed for automakers, household appliances manufactures, construction sector, machine- and shipbuilders and some other selected industries. Prefabricated sheets and stamped products along with pressed-and-welded components will be supplied to car giants (whose plants are already in operation or under construction in Russia) including Ford Motor Company, General Motors Company, Nissan Motor, Hyundai Motor Company and Renault Group. MMK-Intercos will also ship its products to domestically and globally operating manufactures of appliances such as Bosch und Siemens Hausgerate GmbH, LG Corp., Indesit Company and others.

Victor Rashnikov, MMK OJSC Chairman of the Board, stated: "We have always been commited to the highest quality and efficiency standards in serving metal-consuming sectors of the Russian economy. To meet our customers' demands even more efficiently, we will directly ship flat products from MMK for further processing at MMK-Intercos. In perspective, this newly-opened facility will process cold-rolled auto sheets shipped from Mill 2000 currently under construction at MMK." According to Rashnikov, "Mill 2000 will be producing HVA (high-value-added) products for domestic and international customers. This will boost MMK's competitiveness and contribute to further development of metallurgy-related industries in Russia." "This brand-new production facility in St. Petersburg, - Rashnikov said, - will create new jobs, including those for highly-qualified specialists, which is of particular social importance in the North-Western Region of the country."

Valentina Matviyenko, the Governor of St. Petersburg, said: "Today we are making yet another step towards genuinely innovative economy that will be able to withstand most forceful international competition. The plant we are opening today is a powerful up-to-date production facility equipped with the 21st century technology."

The Governor emphasized that the plant could handle the entire production cycle - from developing new technologies to production of cutting-edge components. "We in St. Petersburg have been witnessing quite successful development of the car-making cluster represented by global automotive giants that will eventually become the key partners of this new manufacturing facility of Magnitogorsk Iron & Steel Works,"- Matviyenko noted stressing the high importance of the partner-like relationships established between the city and MMK, one of the leaders in the global iron-and-steel industry.

About Intercos-IV

The Closed Joint Stock Company Intercos-IV, founded in St. Petersburg in 1992, specializes in producing large- to extra-large dies and molds (up to 70 tons) and tooling for automotive industry and appliances manufacturers. MMK acquired a 75% stake in Intercos-IV in August 2007. With this acquisition MMK has established a strong foothold in the metals market in Russia's North-West and strengthened its positions among suppliers of dies and components to global manufacturers operating in Russia.

The company may handle the entire production cycle - from design and engineering to production of ready-made stamped components shipped to assembly lines in commercial volumes. The company collaborates with global industry leaders and, since its founding, has generated a significant customer base. The company supplies its products to all domestic car makers and is known as an official supplier of Ford Europe, Ford Russia and Volkswagen AG. Intercos-IV cooperates with General Motors Company, Hayes Lemmerz International, Inc., Hyundai Motor Company, Renault Group, Bosch und Siemens Hausgerate GmbH, and LG Corp.

About MMK

The Open 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. MMK realizes MMK-Atakas project in Turkey with annual capacity of 2.3 mln tons of flat steel. In 2009 the company produced 9.6 mln tons of crude steel and 8.8 mln tons of commercial steel products. MMK Group revenue in 2009 stood at USD 5.081 bn, EBITDA at USD 1.285 bn, profit for the period - USD 219 mln.

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