2010 First Half Results PresentationOctober 5, 2010October 5, 2010

Disclaimer

This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy oracquire securities of Mechel OAO (Mechel) or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity. No part ofthis presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investmentd i i h t A h f iti h ld b d l l th b i f i f ti M h l fil f ti t ti ith th U Sdecision whatsoever. Any purchase of securities should be made solely on the basis of information Mechel files from time to time with the U.S.Securities and Exchange Commission. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should beplaced on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Mechel or any of itsaffiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use ofthis presentation or its contents or otherwise arising in connection with the presentation.

Thi t ti t i j ti th f d l ki t t t di f t t th f t fi i l f f M h lThis presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of Mechel,as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements areonly predictions and that actual events or results may differ materially. We do not intend to update these statements. We refer you to the documentsMechel files from time to time with the U.S. Securities and Exchange Commission, including our Form 20-F. These documents contain and identifyimportant factors, including those contained in the section captioned “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” inour Form 20-F, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including,

th th hi t f ti i t d l l f fit bilit th t d f t i iti th i t f titiamong others, the achievement of anticipated levels of profitability, growth, cost and synergy of our recent acquisitions, the impact of competitivepricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legalenvironment, volatility in stock markets or in the price of our shares or ADRs, financial risk management and the impact of general business and globaleconomic conditions.

The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice.

2

Financial ReviewFinancial Review

3

Segments Overview

523500

600

EBITDA by segments $ Million

Upward dynamics in steel and mining led the 28% growth in consolidated revenue

Steel Mining Ferroalloy Power Cons.adj. Consolidated

420

258

167200

300

400

500the 28% growth in consolidated revenue

Export sales grew as markets continued to recover

118

2

(46)

911

167

48 2329

(100)

0

100

200

Gross margin up to 38% of the revenue

EBITDA margin up to 22% of the revenue( )

1Q10 2Q10

Revenue from third parties Revenue by market $ Million$ Million

30% 30% 27% 31%

8% 10% 6%10%6%5%5%5%

60%

80%

100%

18%

16% 12%13%13%

6%5% 6% 5%9%13% 10%7% 3%3% 3% 2%

60%

80%

100%

$ Million$ Million2,460 4,331 1,900 2,431 2,460 4,331 1,900 2,431

55% 57% 58% 57%20%

40%

60%

50% 52% 49%

22%19% 18% 20%

44%20%

40%

60%

4

0%1H09 1H10 1Q10 2Q10

Steel Mining Pow er Ferroalloys

0%1H09 1H10 1Q10 2Q10

Russia Europe Asia CIS Middle East Other

Steel Segment Performance

108

2,400

2,800

15%

20%

Revenue, EBITDA $ Million

Revenue grew 27% to $1.4 bn in 2Q10

57% of the Group’s revenue

2,484

5752

72

6%

-4%

8%4%

1,200

1,600

2,000

-5%

0%

5%

10%57% of the Group s revenue

Growth of cash costs reflects rising raw material prices

EBITDA 2 $118 i 2Q101,349

1,0931,391

0

400

800

1H09 1H10 1Q10 2Q10-20%

-15%

-10%EBITDA up 2.5x to $118 mn in 2Q10

Negative net result of $27 mn affected by FX loss of $79 mn in 2Q10

Intersegment revenues (lhs)Revenues (lhs)EBITDA margin (rhs)

COS structureCash costs, US$/tonne2%

$1,276 mn $2,081 mn

285284260276 297 301331 355 373

385382365

496479473

400

600

12%9%

14%4%

11%2%2%2%

60%

80%

100%

260

0

200 68%76%

0%

20%

40%

5

0Billets, ChMK Wire Rod, ChMK Rebar, ChMK

2Q09 3Q09 4Q09 1Q10 2Q10

0%1H09 1H10

Raw materials and purchased goods Staff costsEnergy DepreciationOther

Steel Segment Performance

12%21% 21% 20%

100%

External sales structure

Healthy price trends across all main products

31% 22% 22% 23%

4% 4% 4%

8%5% 5% 5%

15%13% 12% 14%

3% 9%8%8%9%

40%

60%

80%

Flexibility in export sales allowed to change sales markets quickly

Resale of 3rd party products reached 21%

14% 21% 21% 20%

7% 5%8%

6%

0%

20%

1H09 1H10 1Q10 2Q10

Resale of 3rd party products reached 21% of revenue in 2Q10

Improved sales mix to benefit from high value-added products

Billets Wire Rod RebarStainless flat Constructional steel Forgings and stampingsHardware Other

4 139

Average sales prices FCA, US$/tonneRevenue breakdown by region

2,265

3,3783,590

1,834

3,7614,139

2,0502,800

3,500

4,200

22%17% 17% 17%

10% 1%8%4%

5% 7%8%7%

10%18%14%19%

3%2%2% 3%

60%

80%

100%

393342

524685

442

714567479441

372378

439 483 644730

1,693

837796

619510

555

700

1,400

2,100

45%54% 53% 54%

%

20%

40%

6

0

1Q10

0%1H09 1H10 1Q10 2Q10

Russia Europe Asia CIS Middle East Other2Q103Q09 4Q09

Mining Segment Performance

3871 500

1,800

50%

60%

Revenue, EBITDA $ MillionOverall improvement in financial results as

the markets are moving to pre-crisis levels:

1 287

234

153

387

160

35%

18%

25%

42%

600

900

1,200

1,500

20%

30%

40%

50%Revenue up 44% q-o-q

EBITDA margin at 42% in 2Q10

Net profit up 63% q-o-q 723

1,287

527760

15318%

0

300

600

1H09 1H10 1Q10 2Q100%

10%

20%Cash cost for all major products decreased following the production growth and cost control

Intersegment revenues (lhs)Revenues (lhs)EBITDA margin (rhs)

COS structureCash costs, US$/tonne$497 mn $785 mn

Operating expenses fell to 20% of the revenue

21%21%

9%

17%

10%

17%

5% 9%

60%

80%

100%

3236

31 302832 31

43 44

3833

3040

50

60$497 mn $785 mn

48% 43%

21%

0%

20%

40%2223

15

30

2228

1814

171925 23

1922

30

0

10

20

30

7

0%1H09 1H10

Raw materials and purchased goods Staff costsEnergy Depreciation and depletionOther

0Coking coal

conc. SKCC

Coking coalconc.

Yakutugol

Anthracitesand PCI SKCC

Steam coalSKCC

Steam coalYakutugol

Iron ore

3Q09 4Q09 1Q10 2Q10

Mining Segment Performance

External sales structureStrong upward price trends across all products 14% 14% 14% 15%

7% 7% 8% 7%100%

Coking concentrate sales volumes up 17% in 2Q10 as production volumes reached pre-crisis level 15% 11%

5%

13% 13% 13%

%

13%52%

2%9% 7% 10%

40%

60%

80%

Sales of PCI increased 3x

Recovery in European market increase its sales in the revenue

20%

44% 43% 44%

0%

20%

1H09 1H10 1Q10 2Q10

Average sales prices FCA, US$/tonneRevenue breakdown by region

Coking coal Steam coal Coke

Anthracites and PCI Iron ore Other

210235

329

250

300

350

400

19% 14%12%

22%19%

1%6%4%

13%

20%18%

1%6%3%7%4%4%3%4%

60%

80%

100%

37

138

9252 3835

112

50 4939

128

8657

164

114

6197

0

50

100

150

200

30% 36% 34% 36%

21%21% 19% 22%

1% 1%

0%

20%

40%

0

8

0%1H09 1H10 1Q10 2Q10

Russia Europe CIS Asia w/o China China Middle East Other

Cokingcoal

Steamcoal

Ironore

3Q09 4Q09 1Q09 2Q10

Coke Anthracites and PCI

Ferroalloys Segment Performance

300

350 50%

Revenue, EBITDA $ Million

2x growth in intersegment revenue as a result of recovery in steel production

228

52

77

19

13%-4%

9%16%

150

200

250

0%

25%a result of recovery in steel production

Gross margin reached 18% in 2Q10

Ni and Cr cash cost grew on the back 228

95133131

25

0

50

100

1H09 1H10 1Q10 2Q10-50%

-25%

gof rising raw material prices

EBITDA up 2.7x to $29 mn in 2Q10

Intersegment revenues (lhs)Revenues (lhs)EBITDA margin (rhs)

18 618

COS structureCash costs, US$/tonne$161 mn $258 mn

12% 10%

19%

13%

19%

12%

2% 7%

60%

80%

100%

13,69615,233

16,98718,618

12,000

16,000

20,000

54% 52%

10%

20%

40%

616

1,3741,248

617

1,661

633616

2,214

4,000

8,0002

1

9

0%1H09 1H10

Raw materials and purchased goods Staff costsEnergy Depreciation and depletionOther

0Nickel Ferrosilicon Chrome

3Q09 4Q09 1Q10 2Q10

Ferroalloys Segment Performance

Strong upward price trends q-o-q:

Ni up 20%21%

1%3% 7%1%1% 1%2%100%

External sales structure

FeSi up 24%

Cr up 41%

Sales of Ni formed 60% of segment’s 60%

25%19%

22%

17%

28%27%

21%24%

40%

60%

80%

Sales of Ni formed 60% of segment’s revenue from 3d parties in 2Q10

European share grew on higher Ni sales

45% 53%43%

60%

0%

20%

1H09 1H10 1Q10 2Q10

Nickel Ferrosilicon Chrome Chrome ore OtherShare of sales to China reached 4% in 1H10

Revenue breakdown by region Average sales prices FCA, US$/tonne

Nickel Ferrosilicon Chrome Chrome ore Other

16,07816,431

18,40722,039

2 663

16,000

20,000

24,000

23%

21%22%14%

7%18%

12% 12%3%5%4% 3%

60%

80%

100%

919

1,6021,784

9631,193

1,8931,477

2,663

0

4,000

8,000

12,000

70% 63%54%

69%

0%

20%

40%

1

3

2

00%1H09 1H10 1Q10 2Q10

Europe Russia Asia Other

Nickel Ferrosilicon Chrome

3Q09 4Q09 1Q10 2Q10

10

Power Segment Performance

500

600

12%

15%

Revenue, EBITDA $ Million

Sales decrease 20% in 2Q10 due to seasonal factors

139

209

112975% 5%

8%

200

300

400

500

6%

9%

12%seasonal factors

Cash costs slid 7% supporting the level of gross margin at 27%

97

333185 148256

1%0

100

200

1H09 1H10 1Q10 2Q100%

3%S&D expenses fell 24% helping to keep operations marginally profitable

Intersegment revenues(lhs)Revenues (lhs)EBITDA margin (rhs)

2%2%

COS structureAverage electricity sales prices and cash costs, US$/MWh $285 mn $379 mn

3% 3%2%3%2%2%

60%

80%

100%

42.5 41.0 43.0 45.2 43.441.640

50

60

92% 93%

0%

20%

40%26.8 24.821.9

28.024.5

15.5

10

20

30

11

%1H09 1H10

Raw materials and purchased goods Staff costs Depreciation Other

101Q09 2Q09 3Q09 4Q09 1Q10 2Q10

Sales pirce Cash costs

Improving Financial Performance

Considerable revenue growth driven by continued markets’ recovery

Improved financial performance in 2Q10:p p

Revenue increased by 28% to $2.4 bn

1.4x growth in Gross Income

2 i i EBITDA t $5232x increase in EBITDA to $523 mn

FX loss of $182 mn resulted in decline of Net Income to $38 mn in 2Q10

Revenue, EBITDA and Net profitRevenue Dynamics

2,4314202 500

3,000 2,4312,500

30%

40%$ Million$ Million

1,900 111

1,500

2,000

2,500

1,281

1,5741,720

1,900

4%

16% 14% 14%

22%

1,500

2,000

10%

20%

30%

500

1,000

21947

253 240 258

523

132

414

83 380

500

1,000

20%

-10%

0%

12

01Q10 Volume Price 2Q10

02Q09 3Q09 4Q09 1Q10 2Q10

-20%

Revenue (lhs) EBITDA (lhs)

Net profit (lhs) EBITDA margin (rhs)

Cash Generation Capacity

2Q10 Negative Operating CF of $159 mn as $515 mn reinvested in working capital to facilitate growth of sales

Improved economics and liquidity allowed to progress with main investment projects as planned

Net Cash FlowOperating cash flow

$274 mn cash balance as of June 30, 2010

562600

800

Net Cash Flow$ Million

2009 1Q10

Operating cash flow$ Million

22%

2,000

2,500

20%

25% 2Q10

375

226

381

(97)

0

200

400

2,23010%

500

1,000

1,500

5%

10%

15%

(710)

(207)(159)

(97)

(299)

(800)

(600)

(400)

(200)

(159)(97)

562

-7%-5%

(1 000)

(500)

0

2008 2009 1Q10 2Q10-10%

-5%

0%

13

(710)(800)Operating activities Investment activitiesFinancial activities

(1,000) -10%

Operating cash flow (left scale) as % of sales (right scale)

Debt Profile

540600 25

FFO, Net Debt/EBITDA and Interest coverage$700 mn of short-term debt extended into the 2H2011 upon a successful refinancing of a syndicated facility in September 2010

$ Million x

203239

18.2

300

450

10

15

20of a syndicated facility in September 2010

$590 mn of unutilized committed short-term and long-term facilities as of October 1 2010 203

158

5.07.68.6

3.32.12.11.8

0

150

3Q09 4Q09 1Q10 2Q100

5

10October 1, 2010

Working capital requirements fully covered with existing loan commitments in 2010

FFO (lhs)Net Debt / EBITDA (rhs)EBITDA/Interest expense, net (rhs)

Loans repayment schedule as at September 15, 2010$ Million

315

1,05741

2355

1,200

1,400

1,600

1,800

Repayment of capex finance facilities

$ Million

547 498

3151,074

326

326 326

326

1,195

65 8200

400

600

8001,000

p y pRepayment of other term loansRUB Сommercial papers and bonds (incl. put options)renewable working capital and trade finance lines

237 326 3260

200

Sep. 15 - Dec. 31, 2010

2011 2012 2013 2014 and after

14

Financial Results Overview

US$ million unless otherwise stated

2Q10 1Q10 Change, %

Revenue 2 431 1 900 28%Revenue 2,431 1,900 28%

Cost of sales (1,504) (1,256) 20%

Gross margin 38.1% 33.9%

Operating profit 408 148 176%

Operating margin 16.8% 7.8%

EBITDA 523 258 103%EBITDA 523 258 103%

EBITDA margin 21.5% 13.6%

Net Income 38 83 -54%

Net Income margin 1.6% 4.3%

Sales volumes*, ‘000 tonnesMining segment 4,852 4,725 3%

15

Steel segment 1,724 1,665 4%

* Includes sales to the external customers only