Ukrainian Steel Makers Merge

Metinvest Group and Ilyich Steel Plant Decide to Consolidate Assets

DONETSK, Ukraine, July 1, 2010 - Ilyich Steel Plant and Metinvest Group decided to merge assets
following the talks about potential cooperation and consolidation of efforts
to overcome the consequences of the global financial crisis. The aggregate
production potential will make 20m tonnes of steel per year after the
consolidation.

The partnership will include all businesses of Ilyich Steel
Plant with OSC Ilyich Iron and Steel Works of Mariupol being the major asset.
Metinvest Group will join the partnership with its Ingulets Ore Mining and
Processing Plant, Krasnodonugol mining group, Avdeyevka Coke and Chemical
Plant, Khartsyzsk Pipe Plant as well as provide investment to development of
modernization of the Ilyich Plant to the amount of USD 2 billion. After
completion of the merger, the share of Metinvest Group will make 75%, while
25% will remain under control of Ilyich Steel Plant headed by Vladimir Boyko.
The further steps and the final format of partnership will be clear after the
legal examination is over and all permissions of regulatory agencies in
Ukraine and internationally have been obtained. The agreements will be
formalized in full compliance with the current laws.

Metinvest Group will participate in acquisition of
additionally issued shares of Ilyich Stal and OSC Ilyich Iron and Steel Works
of Mariupol as a first step in the merger process.

"The partnership with Ilyich Plant is an important step in
realization of our long-term strategy aimed at strengthening the vertical
integration of Metinvest and achieving the maximum increase in production of
high-quality yet low-cost steel", said Igor Syry, CEO of Metinvest Holding.
"We expect to get strong synergies, firstly, by optimizing the modernization
programmes at our steel assets, raising the production efficiency and
improving our market position. We estimate that the aggregate production
potential will make 20m tonnes of steel per year. The merger will help to
reinforce the position of the national mining and metals industry in the
global markets, which is a keystone to the growth of Ukraine's economy and
higher economic security."

Profile:

Metinvest is an international vertically-integrated mining and
metals group of companies. Production facilities of Metinvest allow the
enterprises both to satisfy their own needs in raw materials, liquid steel
and semi-finished products and to be a key supplier for many other Ukrainian
and European companies, as well as Asian businesses. The shareholders of
Metinvest Group are SCM Group (75%) and Smart Group (25%) that manage the
company on the partnership principle.

Metinvest Holding is the managing company of Metinvest Group.

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    Press office
    Metinvest Group
    +38-062-388-16-70

Press office, Metinvest Group, +38-062-388-16-70