OAO Severstal announced that its 61.5% subsidiary has entered into an agreement with the government of Liberia to develop the Putu iron ore project. The Mineral Development Agreement was signed on September 3rd 2010, approved by the President of Liberia and ratified by the Liberian Legislature on September 9th 2010.

Eõploration completed thus far at the Putu project indicates a mineral resource of 1.08 billion tonnes of iron mineralization at an average grade of just under 40%. The project is situated on a 13km long ridge, located only 120km inland from the deepwater shoreline of southeastern Liberia. Exploration works are continuing and the deposit has the potential to contain significant additional resources. A pre feasibility study on the project should be completed by September 2012. Since 2008 Severstal has held a 61.5% interest in the project following the investment of USD 30 million into the pre-feasibility study. African Aura, an exploration and development company listed on the TSX V and London's AIM holds a 38.5% interest in the Putu project. Severstal also holds a 3.56% interest in African Aura.

The MDA fixes inter alia the fiscal and commercial regime for the development and mining of the Putu iron ore project. The MDA term is for a period of twenty five years and this can be extended further in line with the life of mine. It also sets out the main principles of corporate and social responsibility with total social contributions of USD 15.75 million for 2010−2017 and thereafter USD 3 million per year or 0.5% of the prior year’s taxable income.

Mr Vadim Larin CEO of Severstal Resources said that “The granting of the Mineral Development Agreement represents a tremendous opportunity for Severstal, our partners and the people of Liberia. The project will bring important inward investment into the country and generate significant tax revenues. We are fully committed to the sustainable and socially responsible development of the project in the interests of all stakeholders. It represents an important new opportunity for Severstal by providing access to the international seaborne markets as we continue our development as a leading international mining business.”