December 03, 2008

Update on NLMK CAPEX in 2007

NLMK has continued its dynamic development through the implementation of the 2nd Phase of the Technical Upgrading Program in 2007

1. NLMK has signed contract on the supply of two new ladle furnaces for the Company's main site in Lipetsk.

2. NLMK has signed contract on the construction of Blast Furnace No.7 with 3.4 million tonnes capacity. This project will enable the production of crude steel at NLMK’s main site to increase to 12.4 million tonnes by 2012.

3. NLMK has started construction of the third pre-painting line with an annual capacity of 200,000 tonnes. After the project completion, NLMK will increase coating capacity to 1.1 million tonnes, including 0.6 million tonnes of pre painted steel.

4. NLMK has started construction of two new transformer and dynamo steel rolling mills, each with an annual capacity of 110,000 tonnes and one HDG line of 300,000 tonnes capacity.

5. NLMK has upgraded its reversing cold rolling mill for the production of electrical grain-oriented steel to raise its capacity from 67,000 to 130,000 tonnes.

6. NLMK has commissioned a new 300,000 tonnes per year pickling line for hot rolled transformer and carbon steel at the main production site in Lipetsk.