METALLOINVEST and Severstal announce signing of long-term contract

METALLOINVEST (the “Company”) and OAO Severstal (“Severstal”) today announced the signing of a three year contract for the supply of iron ore raw materials. The contract stipulates a total volume of iron ore concentrate shipments of approximately 3 million tonnes, and provides for, amongst other terms, the supply of dry iron ore concentrate during winter periods.

Pricing for the supplied products will be in line with current market indicators, while the applied formula will take into account the dynamics of world market prices for iron ore products.

Lebedinsky GOK (part of METALLOINVEST) will supply the concentrate to Cherepovets Metallurgical Mill (part of Severstal Russian Steel).

Andrey Prosyanik, Deputy Sales Director at Management Company METALLOINVEST, commented: “METALLOINVEST’s production capacity enables us to meet the growing demand for high-quality iron ore raw materials. The signing of long-term contracts to deliver such products to Russian enterprises is one of our priorities. In 2011-2012, the Company signed long-term contracts with OJSC NLMK and OJSC MMK.”

Denis Pavlyuchenkov, Director of Procurement and Logistics at Severstal Russian Steel, added: “Severstal Resources’ mining companies supply 75% of the iron ore raw materials required by Cherepovets Metallurgical Mill. External iron ore producers provide the other 25% on a one year contract basis, thus ensuring the optimisation of technological processes. By signing this contract with METALLOINVEST, Severstal has secured long-term supplies of raw materials with high-quality characteristics which, according to our calculations, will enable the company to improve technological processes of pig iron production.”

The signing of a new contract is an extension of a long-standing mutually beneficial partnership between the companies. It will ensure the stable sale of products of METALLOINVEST’s mining companies and contribute to achieving Severstal’s and METALLOINVEST’s production and financial targets.