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Russian Steel Industry Domestic growth and export capacities

May 2011

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Severstal: Global Overview

Liberian iron ore project

Core Mining

Columbus mini-mill

DearbornPBS Coals

Cherepovets Steel Mill

• SEVERSTAL RUSSIAN STEEL is a leading steel producer in Russia with focus on value-added flat steel products for the construction, automotive, machi-nery, and oil and gas industries.

• SEVERSTAL INTERNATIONAL is the forth largest flat steels producer in the US and Western Europe with premium customers in the automotive, energy, and construction industries.

• SEVERSTAL RESOURCES has the capacity and product mix to provide almost all of the iron ore and coking coal requirements of our steel operations in Russia.

Severstal employs more than 90 000 people in Russia and other CIS countries, USA, Europe

Steel Production volume in 2010 (tons): 14.7m

Izhora Pipe MillIron ore & coking coal mining in RussiaGold mining Russia & Kazakhstan

Gold mining greenfields in Guinea and Burkina Faso

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Russian Steel Demand Dynamics and Forecast

Apparent steel consumption (mln.t)

Apparent steel consumption forecast:• 8% growth in 2011 (World average: 6-7%)• 5.7% CAGR in 2010-2015 (conservatively)• Growth drivers: civil engineering, machinery sector, development of gas transport infrastructure

Flat steel, long steel and pipes&tubes demand performance in Russia (mln.t)

Steel capacity utilization in Russia/World (%)

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CherMK Severstal: one the largest Russian steelmakers

Deliveries to the domestic market, 2010:

5.5 mln.tTailored approach, serving various market segments

Annual production capacity exceeds 11 million tons• Flat and long products: HR and CR flat products, galvanized and colour-

coated products; long-steel applications. • Mill 5000 (Kolpino) produces hot-rolled plates and strips.• Automotive grade galvanizing line (Severgal) produces high-quality

galvanized auto body sheet products, coated with zinc-iron alloy.

CHEREPOVETS STEEL MILL (CherMK) • Strategic focus on domestic market.• Emphasis on value-added products: high quality steels for automotive industry, hot rolled strips and plates, pipes for oil and gas mainlines• New focus on infrastructure industries (tube makers and construction) and automotive• The company strategically differentiates in both product range and supporting service

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Steel Exports from Russia

Steel exports from Russia (mln.t) General Exporters

Russian Exports in 2010

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CherMK Severstal Exports

CherMK International supplies, 2010:

4,6 mln.tCherMK European supply network

CherMK

Severstallat

SeverstallatSilesia

SeverstalBel

SeverstalUkraine

Severstal Export

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Achieve more together

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