Moscow, Russia – March 15, 2005 – Mechel (NYSE: MTL) announces signing of a new cooperation agreement with the Republic of Karelia, where its Vyartsilya Metal Products Plant is located.

Mechel’s Chairman of the Board Igor Zyuzin met yesterday with the Governor of the Republic of Karelia, Sergey Katanandov. The new agreement will develop the existing partnership between Mechel and the Republic of Karelia and provide further growth of the economic potential of Vyartsilya Metal Products Plant, increasing its efficiency and the implementation of social programs.

Both parties expressed their mutual satisfaction with the results of cooperation achieved since 2002, when the previous cooperation agreement was signed. Both parties noted their interaction in restoration of Vyartsilya Metal Products Plant that experienced a fire last December. Production was completely resumed at the plant in mid-January, and pre-fire production volumes were reached this month.

Vyartsilya Metal Products Plant is one of Mechel’s primary hardware producers. Along with Vyartsilya Metal Products Plant, hardware products are also manufactured at Beloretsk Metallurgical Plant, Izhstal, Mechel Campia Turzii, Mechel Targoviste, and Mechel Nemunas. Mechel’s consolidated hardware output in 2004 totaled 592.7 thousand tons, an increase of 27.1% over 2003.

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Mechel Steel Group OAO
Irina Ostryakova
Director of Communications
Phone: 7-095-258-18-28
Fax: 7-095-258-18-38
irina.ostryakova@mechel.com

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Mechel Steel Group is a Russian metals and mining company, uniting producers of steel, rolled products, hardware, coal, iron ore concentrate, and nickel. Mechel Steel Group products are marketed domestically and internationally.

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Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Mechel Steel Group, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements. We refer you to the documents Mechel Steel Group files from time to time with the U.S. Securities and Exchange Commission, including our Form F-1. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in our Form F-1, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of our recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or ADRs, financial risk management and the impact of general business and global economic conditions.