Mechel in a recent announcement on power segment for 2008 announced the following

1. Revenue in Mechel’s power segment is expected to exceed USD 190 million increase of about 10 times over revenue of USD 19.1 million in the first quarter of 2007. It is expected that net income for the segment will amount to approximately USD 15 million an increase of more than six times net income of USD 2.5 million reported in the first quarter of the last year.

2. Gross profit is expected to exceed USD 100 million compared with USD 5 million in the corresponding period of 2007 and operating income is expected to exceed USD 27 million an increase of approximately 670% over USD 3.5 million in the first quarter of 2007.

3. EBITDA in the power segment in the first quarter of 2008 is expected to amount to not less than USD 30 million approximately eight times higher than the USD 3.7 million reported in the first quarter of 2007.

4. EBITDA margin rose to more than 11% in the first quarter 2008 compared to 9.1% in the first quarter 2007.

Mr Vladimir Polin CEO of Mechel said that “Electrical power volumes generated in the first quarter of this year far exceed those of 2007 primarily based on the inclusion of the Southern Kuzbass Power Plant into Mechel’s structure. During last year we made a number of acquisitions in the power business and this year we took steps to develop the power assets management structure by consolidating of power-generating facilities to our OOO Mechel-Energo subsidiary.”

Mr Igor Zyuzin said that “Our anticipated financial results for the first quarter of 2008 demonstrate the effectiveness of Mechel’s integrated business model and strategy, as well as a market environment that has continued to be favorable, as well as our investments aimed at productivity enhancements and increased output of high value added products. In the first quarter we also moved forward with our plans to start construction of a railroad to Elga coal deposit. The commencement of operations at this deposit will enable Mechel to strengthen its position as one of the world’s coking coal market leaders. We believe that the record profit performance and our operational progress have created a strong foundation for Mechel to achieve good results for the full year.”