Metalloinvest announces operational results for the first half of 2011

METALLOINVEST (“the Holding”), a leading global iron ore and HBI producer based in Russia, today announced its operational results for H1 2011.

In the first half of 2011, METALLOINVEST increased iron ore production by 7% half-year on half-year to 20.2 million tonnes due to increased mining efficiency and production optimization. Iron ore shipments to third parties rose by 26.2% over the same period.

The Holding’s pellet production and shipment volumes were stable half-year on half-year and amounted to 11.2 million tonnes and 6.9 million tonnes respectively. METALLOINVEST demonstrated a 10.0% half-year on half-year increase in HBI/DRI production to 2.6 million tonnes and a 17.8% increase in shipment volumes which amounted to 1.2 million tonnes.

Eduard Potapov, Chief Executive Officer of METALLOINVEST, commented: “METALLOINVEST’s results for the first half of 2011 reinstated our strategy aimed at increasing production volumes and growing a share of value-added products in our product mix. These steps enabled us to strengthen the Holding’s position as one of the world’s leading independent mining companies.”

Crude steel production and steel product shipment volumes were down by 3.3% and 4.0% half-year on half-year to 2.9 million tonnes and 2.6 million tonnes respectively. A slight decline in crude steel output was due to the increase in a share of high-value added products in the Holding’s product mix.

In the first half of 2011, the export of iron ore, pellets and HBI products increased up to 75.5% in the consolidated shipments of these products. China was the largest consumer of iron ore, pellets and HBI accounting for 5.7 million tonnes of products or 52.0% of the Holding’s export shipment volumes.

Eduard Potapov, Chief Executive Officer of METALLOINVEST, also noted: “Russia remains our key market, and we continue developing our long-term relationships with the largest local customers. At the same time, METALLOINVEST actively works towards expanding its customer base and delivers products to a broad range of geographical regions.”

The Holding’s key clients for iron ore, pellets and HBI products are located in China and other Asian countries, the Middle East, as well as Eastern and Western Europe.

METALLOINVEST has the world’s largest iron ore deposits under operation, is the leading HBI supplier globally and is one of the major steel producers in Russia. The Holding comprises Lebedinsky GOK, Mikhailovsky GOK, Oskol Elektrometallurgical Plant and Ural Steel. METALLOINVEST generated US$ 7.23 billion of revenues for the full year 2010.