MoU with an Indian mining partner

OAO Severstal and NMDC sign Memorandum of Understanding

New Delhi, December 10, 2010. OAO Severstal, a leading vertically integrated international steel and mining company, and the National Mineral Development Corporation Limited ("NMDC"), a Navratna Public Sector Undertaking under the Government of India announce that they have signed a Memorandum of Understanding ("MOU") to establish a Joint Venture company to build an integrated steel plant.

The JVC proposes to have its captive coking coal mining subsidiary in Russia and iron ore mining subsidiary in India which will ensure long term supply of these critical steelmaking raw materials to the proposed steel plant. The plant which will be constructed in Karnataka will have a capacity between 2 and 5Mill tpa.

NMDC and Severstal will each have a 50 % shareholding in the Joint Venture and will appoint the senior management team.

Alexey Mordashov, Chief Executive of OAO Severstal, said: "The signing of this MOU is an important strategic development for the Severstal as it will establish an integrated steel plant in one of the world's most attractive growth markets".

Rana Som, Chairman cum Managing Director of NMDC Limited said: "As both NMDC and Severstal are strong entities in their respective fields, their partnership will integrate their strengths, synergise their capabilities and not only usher in new opportunities for the two companies but will also foster the friendship that exists between India and Russia."

ОАО Severstal is one of the world's leading integrated steel and mining companies with a listing on the Russian Trading System (CHMF), Moscow Interbank Currency Exchange and the London Stock Exchange (SVST). The company operated high-quality assets in Russia, North America and Europe. In 2009, Severstal produced 16.7 million tones of steel. Revenues were $13.05 billion and EBITDA was $844 million.

For further information please contact:

Severstal, Investor Relations

Vladimir Zaluzhsky

T: +7 (495) 926-77-66 ext. 6375

vladimir.zaluzhsky@severstal.com

Severstal, Public Relations

Maria Medvedeva

T: +7 (495) 926-77-66 ext. 6536

maria.medvedeva@severstal.com 

Hudson Sandler

Andrew Hayes/Andrew Leach/Maria Ignatova

+44 (0)20 7796 4133