Agreement for sale of PBS Coals

Moscow, Russia – 15 July 2014 - OAO Severstal (MICEX-RTS: CHMF; LSE: SVST), one of the world’s leading vertically integrated steel and steel-related mining companies, announces that its wholly-owned subsidiary 7027940 Canada Limited has entered into a definitive agreement with Corsa Coal Corp., a Canadian public company, for the sale of PBS Coals Inc., a metallurgical coal producer located in Pennsylvania, USA.

 The transaction with enterprise value of US$140 mln is expected to complete by the mid of August, 2014, subject to customary closing conditions. The proceeds from the deal to be used for Severstal’s general corporate purposes.

As transaction consideration, Severstal will receive US$60 mln in cash, plus the balance, if any, of US$20 mln in cash currently used as bonding collateral by PBS Coals Inc to fund reclamation liabilities. These US$20 mln will be used to fund escrow accounts for certain liabilities assumed by Severstal under the deal terms.

 As part of the transaction, Corsa Coal Corp. has also agreed to assume reclamation and water treatment liabilities totaling approximately US$60 mln.

 The sale reflects Severstal’s commitment to maximize value creation for its shareholders. For Severstal with its current asset portfolio PBS Coals is a business which is not operationally linked to the company’s steel plants in Russia and the USA.

 Vadim Larin, First Deputy CEO and Chief Operating Officer of Severstal, commented: “On behalf of Severstal’s management I would like to express gratitude to the whole team of PBS Coals for their commitment, loyalty and dedication in navigating the company through this challenging period for the global coking coal industry”.

Severstal’s financial adviser on this transaction is Deutsche Bank and its legal adviser is Skadden, Arps, Slate, Meagher & Flom LLP.