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October 08, 2008


Update on acquisitions by NLMK in 2007

NLMK has continued its dynamic development through optimization of the existing Group structure and continuation of its dynamic M&A activities in 2007

1. Disposal of shareholdings in energy assets for USD 78.7 million in February 2007. Proceeds from the transaction were directed to the modernization and development of in-house energy facilities.

2. Disposal of the Company’s 54.88% stake in Lipetskcombank for USD 47.7 million in June 2007.

3. In December 2007, NLMK acquired a 50%+1 share stake in Maxi-Group. The acquisition price is approximately USD 558 million. Maxi-Group comprises several enterprises from collecting and processing scrap to manufacturing long products. The production facilities of existing sites comprise billets 2.4 million tonnes, rebar 1.3 million tonnes and metal ware 0.55 million tonnes. The Scrap Collection division includes 300 scrap collection yards with total capacity of 3.0 million tonnes.

4. NLMK’s subsidiary NTK which ensures the timely supply of raw materials for metallurgical processes and the shipment of finished products to both domestic and international customers increased its fleet of rented and owned railcars to 2,809.

5. In November 2007, NLMK entered into an agreement with TBEA, the major Chinese transformer producer to create a joint service centre to process and sell transformer and dynamo steels in China. The service centre project is aimed at increasing sales volumes and service quality in the rapidly developing Chinese market.

6. Duferco US Investment Corporation, wholly owned subsidiary of Steel Invest & Finance S.A acquired Sharon Coating based at Pennsylvania in USA. The acquisition price was approximately USD 212 million. Winner Steel is one of the largest independent galvanized steel producers in the United States. Its operations are located on a single site in Pennsylvania and include three galvanizing lines with combined annual capacity of more than 1.0 million tonnes.

7. The coke production facilities at Carsid SA were shut down. NLMK now supplies 100% of the coke requirements of the Duferco JV facilities.