Severstal announces US$1.7 billion target capital investment program for 2012

February 27, 2012, Moscow – OAO Severstal (“Severstal” or “the Company”), one of the world’s leading vertically integrated steel and steel related mining companies, plans to invest  US $1.7 billion in 2012 to support its growth and long-term competitive strategy. Severstal’s investment priorities for 2012 include further modernizing and improving its operations, raising standards of health & safety and developing new projects both in Russia and internationally.

In 2012 investment at Severstal Russian Steel will be approximately US $905m. This will include: the continued construction of a mini-mill in Balakovo in Russia’s Saratov Region; the renovation of other production units; and projects to further develop and improve IT infrastructure and customer care.

In 2012 investment at Severstal Resources will be approximately US $659m. Key investment projects include: modernizing coal and iron ore mines and ore-dressing plants and coal preparation plants; installing and implementing new equipment; commissioning a thermoelectric power station burning coalmine methane in Vorkuta; and developing greenfield-projects in Tuva (Russia), Lyberia and Brazil.

In 2012 investment at Severstal North America (SNA) will be approximately US $104m and will include maintenance&development projects as well as developing environmental programs, health & safety, IT-infrastructure and customer care.

Overall, the level of 2012 capex is in line with that of 2011 (excluding Nordgold).

Alexey Kulichenko, CFO of Severstal, commented: “Funded by our strong balance sheet we will invest significantly in the company’s assets in Russia, which, in line with our stated strategy, will be the focus of our 2012 investment program, as well as in the completion of the modernization program at SNA. We will also continue to search and analyze new investment opportunities, which will help us to achieve the company’s key strategic goal of being one of the global industry leaders by EBITDA.”