New leader in Russian Steel

Magnitogorsk Steel (MMK)

0

100

200

300

400

500

600

2

World Steel Industry 2009-2010 Highlights

0

100 000

200 000

300 000

400 000

500 000

600 000

ROW China

2009 Jan-Aug 2010Source: WSA

1 2221 205

1 125

1 272

1 340

1 000

1 100

1 200

1 300

1 400

2007 2008 2009 2010* 2011*

‘m tons

World Steel Production

World Steel Consumption

13%

5%

* - 2010 - 2011 World steel Association forecast

ММК

Slab Cash-cost

Source: World Steel Dynamics, 2009 :

‘000 tons ‘000 tons

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

Rus

sia

Ukr

aine

Kaz

akhs

tan

Oth

er C

IS EU

Oth

er E

urop

ean

Cou

ntrie

s

Nor

th A

mer

ica

Sout

h Am

eric

a

Indi

a

Japa

n

2009 Jan-Aug 2010

-100%

-40%

20%

80%

140%

0

1 000

2 000

3 000

4 000

Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10

% change, yoy'000 tonnes

Total Change, yoy

Russian Steel Dynamics

3

Source: Metal Expert

Monthly Apparent Steel Consumption in Russia Russian Import Structure

Flat and Long Steel Price Performance in RussiaFlat and Long Steel Demand Performance in Russia

0%

50%

100%

150%

200%

250%

Jan-

09

Feb-

09M

ar-0

9

Apr

-09

May

-09

Jun-

09

Jul-0

9

Aug

-09

Sep

-09

Oct

-09

Nov

-09

Dec

-09

Jan-

10

Feb-

10M

ar-1

0

Apr

-10

May

-10

Jun-

10

Jul-1

0

Aug

-10

Sep

-10

Flat steelLong steel

132%

Source: Metal Expert

Source: Metal Courrier * - 2010 annualized figures based on 9 months results

0

1 000

2 000

3 000

4 000

5 000

6 000

2004 2005 2006 2007 2008 2009 2010*

Long productsH/r productsThick plateC/r productsCoated products

HVA products

Source: Metal Expert

-20%

0%

20%

40%

60%

80%

Jan-

09

Feb-

09

Mar

-09

Apr

-09

May

-09

Jun-

09

Jul-0

9

Aug

-09

Sep

-09

Oct

-09

Nov

-09

Dec

-09

Jan-

10

Feb-

10

Mar

-10

Apr

-10

May

-10

Jun-

10

Jul-1

0

Aug

-10

Sep

-10

Oct

-10

HRC, Black Sea export FOBRebar, Black Sea export FOB

22%

4

MMK – Russian Steel Leader

Largest single-site steelmaker in Russia with current crude steel capacity of 14 mlntons

Production growth of more than 60% by 2014

Share of HVA products to grow from current 35% to 50% by 2014

Import substitution strategy: favorable geographical location to meet solid demand from the most intensive steel consuming regions of Russia – the Urals and Volga regions

Great play on Russian infrastructure:

• 16% of the domestic steel market - domestic sales are priced with premium

• Largest exposure to pipe-manufacturing, auto-building and heavy machinery

• More than 50% of steel production for pipes output in Russia

Disciplined investment strategy with “high-return projects” and “high-quality assets” investments approach

The most modern asset base – above USD 5 bn of investments for the last 5 years

ММК Geography

2.3 mln tpy production.New, modern steel making complex and two service

centers.

Metals service center and stamped-product factory.

630 mln tons coal reserves5.9 mln tons mined in 2009.Largest iron-ore deposit,

more than 2 bln tons of reserves.

Interkos-IV

Prioskolsky GОК

MMK Atakas

ENRC

Belon

One of Russia’s largest metalware producers

ММК Metiz

Profit

Source: MMK

Covers 100% of MMK’s scrap needs.

ММК trading house

59%

14%18%

5%

2%

High-priority (domestic)Priority (export)Major (export)

Markets

Other (export)

ММК1st by steel output in Russia (2009)1st by rolled products in Russia (2009)9,6 mln tons of steel (2009)8,8 mln tons of finished products (2009)

% Share of sales, mln tons

Profit’s scrap collecting yards

CAGR (2010-15) = 2,3%CAGR (2010-15) = 5,5%

CAGR (2010-15) = 5,0%

5

CAGR (2010-15) = 6,7%

Long-term agreement withММК (to 2017).

Currently MMK’s main iron-ore supplier.

ММК controls 5%оf Fortescue Metals Group,

one of Australia's largest iron-ore producers.

Fortescue Metals Group

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

2009 2010E 2011E 2012E 2013E 2014Е

MMK MMK-Atakas HVA products

8066

182 190

246

280

343

0

100

200

300

400

Long steel HR flat steel CR flat steel Mill 5000 plate Formedsections

Galvanizedsteel

Colour-coatedsteel

0%

20%

40%

EBITDA/t EBITDA margin

34%

66%

0%

10%

20%

30%

40%

50%

60%

70%

MMK

2011 2012 2013 2014

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

2010E 2011E 2012E 2013E 2014Е

ММК, currently run capacities MMK, operational upside on current capacities

MMK, new capacities MMK-Atakas

MMK Growth Prospects

Finished Steel Products Structure Evolution

Crude Steel Growth Drivers

Sourсe: MMK

Sourсe: ММК6

8 831

17 252

Crude Steel Output Growth Plans18 617

MMK suggests highest growth potential among its Russian peers

EBITDA per ton of Finished Steel Products

Thousand tons

HVA share ≈ 50% starting from 2012

≈ 50 %44 %

38 %

34 %27 %

46 %

HVA (Higher Value-Added products)

> 60% growth

Thousand tons

Unique Cost PositionSlab Cash-cost and Raw-material Price Changes

454

243223

240 250280

320

0

50

100

150

200

250

300

350

400

450

500

2008 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10-100%

-80%

-60%

-40%

-20%

0%

20%

40%

Slab cash cost, $/ton Iron ore, % Coal, % Scrap, %

USD/t

Slab Cash-cost Structure, 2Q10Material and Resource Self-sufficiency

0%

25%

50%

75%

100%

Iron ore* Coal** Scrap ElectricityOwn Purchased

* 70% comes under contract with ENRC till 2017** including sales to third parties

7

Key Raw-material Suppliers Structure

30%

70%

Iron ore

MMK10-year contract till 2017 with ENRC

Coal 6%11%

35%

48%

MMKSiberian Businness Union (f iv e-y ear contracts)Raspadskay aOthers

Scrap

100%

MMK

Electricity

75%

25%

ММК Others

Other

7%

Coal

24%

Other

resources

7%

Fuel & energy

purchases

10%

Wages

3%

Iron ore 29%

Scrap

purchased

17%

Cash cost: 320 USD/t

1H2010

* - cost of purchased electricity **- cost of electricity production for MMK

~ $0,03**(kWHrs)

~ $0,07*(kWHrs)

Leading Positions in the Industry

Source: ММК, Metal Courier

MMK’s share in Russia

163%37%Hot-rolled sheet

26%Color-coated rolled products 2%

30%Galvanized flat products

24%Cold-rolled sheet

65%Cold-rolled narrow strip

6%

100%Tin plate 2%

12%

1%

47%Special sections 1%

1

1

2

1

3

3

Place in Russia

Leading Position on Domestic Market

Hot-rolled sheet5.51 mln tons (63%)

Cold-rolled sheet1.09 mln tons (12%)

Long products1.00 mln tons (11%)

Downstream1.15 mln tons (13%)

Billets and slabs0 mln tons (0%)

Picture

Picture

Picture

Picture

Various Product Types

Source: ММК, 2009

Share in MMK’s total production

8

6%

13%

7%

16%

5% 5%4%

15%28%

ММК

Severstal

NLMK

Urals Steel

ZSMK

NTMK

Chelyabinsk MK

Others

Imports

MMK’s Share of Russian Steel Market, 2009

6,000

8,000

10,000

12,000

1999 2001 2003 2005 2007 2009

ММК Severstal NLMK

th. tonsThe Leader in Finished Steel Production

Source: Company Source: ММК, Metal Courier

Pipe production32%

Spot sales15%

Spot sales in CIS9%

Machine building18%

Construction sector11%

Metalware and semi-integrated

factories9%

Automobile sector

5%

Food industry1%

Fuel and energy companies

0,4% Bridge building0,3%

57%

19%

14%

11%

H/r steel (Thick plate incl.)

Downstream products

Long steel products

C/r steel

Source: MMK

MMK’s Strong Positions on the Domestic MarketDomestic Sales Structure

Russian Sales by Sector

Total: 5,112 kt

Source: MMK

4813 4876

7155

5112

50034761

41854198

3532

28132599

2678

2141

6071

4903

7327

5275

3861

5088

513353125482

5146

48704164

383737223755

0

1000

2000

3000

4000

5000

6000

7000

8000

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Domestic market (Russia + CIS) Export

Dynamics of Domestic and Export Sales, ‘000 tons

Source: MMK

9

Domestic Price Premium

78

162150 156

225

158

223

0

50

100

150

200

250

2004 2005 2006 2007 2008 2009 9M2010

USD/t

Source: MMK

9M2010

9M2010

8%1%

2%

77%

12%

Hot-rolled steel

Cold-rolled steel

Downstream products

Long products

Slabs and billets

Strong Presence on Export MarketsExport Development Strategy

Regional Sales Structure

Africa1%

America4%

Europe7%

Far East & Asia7%

Middle East15%

Domestic66%

Source: ММК

Export Sales Structure

Total: 2,625 kt

54% 59% 61% 66% 72%64%

46% 41% 39% 34% 28%36%

71%

29%

0%

50%

100%

2004 2005 2006 2007 2008 2009 1H2010

Domestic Exports

Share of Export Sales in Revenues

• Company successfully managing export sales

• Key export markets – rapidly-growing markets of Middle-East, Asia and Far-East.

• MMK expanding presence on most promising markets such as Turkey by building new steel making operations and expanding service center network.

Source: ММК

Total: 7,737 kt

Source: ММК

10

9M2010

9M2010

Производство толстого листа - Стан 5000

CAPEX USD 1.7 bnMarket Middle East, EU, AfricaProfile state-of-the-art full-cycle steel productionCapacity, mtpy finished steel 2.3Product types HRC, galvanized, colour-coated

Rationale increase presence in key export regionsgeographical diversification

IRR 14%

Building on the Value

11

Mill 2000 (RUSSIA)Belon (RUSSIA)

MMK-Atakas (TURKEY) Mill 5000 (RUSSIA)

Acquisition cost USD 0.543 bnMarket Russia, EU

Profile growing producer of high-quality coal

Capacity, mtpy coal 5.9 in 2009, 9.8 by 2013Product types coking coal 6.8, thermal coal 3.0

Rationale better business profile and higher profitability

IRR 19.5%

CAPEX USD 1.5 bnMarket Russian oil&gas infrastructureProfile HVA rolling facilitiesCapacity, mtpy finished steel 1.5Product types Heavy plates up to x120 strength class

Rationale #1 supplier to pipe sectorimports replacement

IRR 25%

CAPEX USD 1.5 bnMarket Russia, automotive industryProfile HVA rolling facilitiesCapacity, mtpy finished steel 2.0

Product types CR & galvanized automotive steel

Rationale #1 supplier to automotive sectorimports replacement

IRR 20.6%

What is MMK investment style?

HIGH RETURN RATESYNERGETICVALUE-ADDING

CONSEQUENTTAPPING KEY MARKETSWELL-THOUGHT

ENJOYING STATE SUPPORT

STRENGTHENING LEADERSHIPFOCUSEDBEATING THE CYCLE

HIGH RETURN RATESYNERGETICVALUE-ADDING

CONSEQUENTTAPPING KEY MARKETSWELL-THOUGHT

ENJOYING STATE SUPPORT

STRENGTHENING LEADERSHIPFOCUSEDBEATING THE CYCLE

Производство толстого листа - Стан 5000

• Project completion time under SMS Demag contract - 32 months• November 2007–May 2009: construction of new mill• July 2009: first production• December 2009: launch of Continuous Slab Caster # 6• February 2010: launch of secondary steel-processing complex

ММК is one of ten premium quality producers of thick plates worldwide (in China, Germany, France, Russia and Japan)

which are able to manufacture comparable thick plate

SpecificationsLaunch 2009Capacity, mln tpy 1.5Width, mm up to 4,800Thickness, mm 8-160

Rolling force, tons 12 000

Length, m 24Strength class up to Х120

Plate Mill 5000

Future Use of Mill 5,000 Products

• Cooperation agreement with Gazprom

• Strategic cooperation agreement with TMK

• Cooperation agreement with ChTPZ

• Government asked pipemakers to reduce share of imported plate

12

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

1 000

2 000

3 000

4 000

5 000

6 000

2008 2009 2010Е 2011Е 2012Е 2013Е 2014Е 2015Е

Mill 5,000 products Other

Ship building Boiler building

Bridge building LDP

MMK, % of domestic market

’000 tons

Use of Thick Plate in Russia by Sector

Source: pipe-producers’ estimates, ММК

Agreements

MMK44%

Import17%

Other39%

Mill 5000 - Strengthening Positions in Pipe Sector

Growth in LDP Consumption in Russia

(1,000)

(500)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2002 2003 2004 2005 2006 2007 2008 2009 2010Е 2011Е 2015Е

Production of LDP LDP importsLDP exports Apparent consumption of LDP in Russia

‘000 ton

Key Steel Suppliers to Pipe-builders in Russia

Total: 2.415 kt

1H2010

0

500

1 000

1 500

2 000

2 500

2009 2010Е

Export

Gazprom, Transneft, other

BTS-2

VSTO-2

Sakhalin-Khabarovsk-Vladivostok

Yamal Europe

Nord Stream

Use of LDP Produced in Russia by Project

Source: MMK

Source: pipe-producers’ estimates, MMK13

Geography of Main Pipelines

BTS-2

VSTO-2

Sakhalin-Khabarovsk-Vladivostok

Yamal-EuropeNord Stream

Source: pipe producers’ estimates, ММК

Russia

Source: MMK

1 846

2 312

Укрепление позиций в автопромеStrengthening Position in Auto Industry

Capacity, ’000 tpy 2,000

Width, mm 850-1,880

Thickness, mm 0.28 – 3.0

Steel grades HSLA, IF-HSS, BH, biphase, monophase, ТRIP

Key Mill 2,000 specifications

Key equipment supplier - SMS DemagMill 2,000 Complex

14

Production volumes:• 700,000 tpy of galvanized steel annealed• 400,000 tpy cold-rolled (after annealing) products• 900,000 tpy unannealed productsKey customers:• Carmakers• White goods

575

522

447424

384

233215

11289

20 110

100

200

300

400

500

600

Private Car Ownership

Private car ownership, vehicles per 1,000 people

Russian Vehicle Fleet by Age

Source: AUTO-Consulting, 2010

Source: Rosstat, 2009

33%

44%

23%

less than 10 yrs

more than 10 yrs

more than 20 yrs

1 037

3 388

1 515

4 559

0

1 000

2 000

3 000

4 000

5 000

2009 2010 2011 2012 2013 2014 2015 2020

All vehicle types output, th.pieces

Steel consumption by car-makers

12%

13%

60%

15%

Volga federal region

North-w est federal region

Central federal region

Other

Укрепление позиций в автопромеMill 2000 Cold Rolled Steel ComplexHigh Strength Steels Use

Cold-Rolled Automotive Steel Consumption in Russia*

15Source: ММК

Car-making Projects in Russia by 2015E

Steel Consumption Forecast by Auto-makers in Russia

Source: MMK

Source: World Steel Association

Source: boronextrication.com

Mild Steel30,8%

UHSS9,1%

0

500

1 000

1 500

2 000

2 500

3 000

2010 2015 2020

UHSS (MS, TWIP, HS)

HSS (IF - HS, MA, BH,HSLA)

AHSS (DP, CP, TRIP)

Mild Steel (03-10, IF, IS)25%

700

1 290

2 451

High strength steel types to reach 60% in overall

consumption

≈ 60% by 2020

60%

49%

* Data for motor cars only

HSS44,5%

AHSS15,6%

Выход на быстрорастущий рынок Турции

Locations of Key Markets

Source: TUIK – Turkish Institute of Statistics

Entry to Rapidly Growing Turkish Market

Istanbul

Iskenderun

Flat Steel Market in Turkey, mln tons Turkish Flat Steel Market Structure

Source: ING

6%

12%

13%

28%

18%

13%

7%

Pipe production

Metal Service Centers

Spot sales

Auto industry

Packaging

Boiler making

Other

Europe

Middle East

Africa

16

Priority export markets

Important export markets

8,9

10,110,9

10,3

7,88,5 8,7

9,310,4

-5,1-6,0

-6,6-5,8

-3,2-2,6

11,1

9,710,8

4,64,54,34,13,8

5,9

7,58,5

-0,7-1,2 -0,8 -0,3

-8,0

-4,0

0,0

4,0

8,0

12,0

2005 2006 2007 2008 2009 2010Е 2011Е 2012Е 2013Е 2014Е

Consumption Production Balance

Schedule of MMK-Atakash Project and Construction Costs

•Announcement on the realization of the joint venture

Total construction expenses: $1,175 mln

2007 2008 2009 2010 2011 2012

•Launch of metal service center

•Launch of hot galvanizing line

•Launch of etching line•Launch of reverse mill

•Launch of polymer coating line

•Launch of metals service center

•Launch of galvanized line•Launch of color-coating line

Iske

nder

unIs

tanb

ul

Source: MMK estimates

$100 mln $195 mln $265 mln $572 mln $43 mln

•Launch of mill for hot rolled coil and steel production

Project highlights

17

Start of production – 2010

Ramp up to reach full capacity - 2012

Project CAPEX – USD 1.7 bn

Main production site – near Iskenderun (2.3 mtpa)

2 service centres: Iskenderun, Istanbul

Product types: HRC, galvanized & colour-coated steel

Belovskaya Concentration Plant

Source: MMK estimates

Steam Coal Segment

Coking Coal Segment

Source: MMK estimates

MMK owns 82.6% of Belon

Belon Coal Company

‘000 tons

‘000 tons

18

Belon development programme will result in:• increase in coking coal production to 6.8 mln tons by 2013

• increase in coal concentrate production to 4.3 mln tons by 2013

Advantages of the deal for MMK: • Guaranteed supplies of deficit high grade coking coal

• Stable chemical properties of coal used in steelmaking process, lower consumption of coke

• Natural hedge against rising coal prices

Following the growth strategy Belon acquired license to develop Nikitinsky site with 200 mln reserves of rare “Zh” grade coals in June 2010

Uch. Erunakovsky-2

84

Novobachtsky Slit (KC)

10

Chertinskaya-Koksovaya (Zh)

43

Listviazhnaya (DR)260

Prisalairskaya stripe

11

Kostomov-skaya (Zh)

156

Chertinskaya-Yuzhnaya (2h)

66

Novobachatsky vent

Uch. Erunakovsky

Chertinskaya-Yuzhnaya mine

TsOF BelovskayaChertinskaya-Koksovaya mine

Listvyazhnaya mineKostromovskayamine

OF Listvyazhnaya

Kemerovo

Belovo

Compact location (with a 60 km radius) secures effective

management and logistics

•Securing the delivery of the necessary volumes of coking and steam coal.

•Stability in the coal mixture content, reduction in coking coal expenses.

•Natural hedging of MMK financials from changes in coal concentrate prices.

Synergies for MMK

Coking coal mine

Steam coal mine

Concentration plant

Transport distance – 2,125

Coal Reserves, mln tons

Total: 630 mln tons

Structure of OAO BelonCoking coal segment

Extraction2008 - 3,082,000 tons2009 - 3,404,000 tons

Processing2008 - 4,977,000 tons2009 - 4,892,000 tons

Extraction2008 – 2,449,000 tons2009 – 2,460,000 tons

Processing2008 – 2,812,000 tons2009 – 3,082,000 tons

Steam coal segment

19

Uch. Nikitinsky

Geography of Belon Assets

2Q10 1Q10 2009 2008 2007

Crude steel output, kt 2 984 2 732 9 618 11 957 13 261

Finished steel, kt 2 623 2 453 8 764 10 911 12 203

Revenues, $ mln 2 068 1 652 5 081 10 550 8 197

EBITDA, $ mln 437 374 1 285 2 204 2 407

EBITDA margin, % 21% 22,6% 25% 21% 29%

Net profit, $ mln 53 94 219 1 081 1 306

Net margin, % 3% 6% 4% 10% 16%

Assets, $ mln 15 594 15 822 14 833 14 197 15 887

Credit & loans, $ mln 2 880 2 438 2 118 1 726 1 454

short-term* 931 866 828 1 295 1 224

long-term* 1 949 1 572 1 290 431 230

Shareholder capital, $ mln 9 673 10 415 9 957 9 663 11 634

Cash, $ mln 220 173 165 1 106 256

5 081

10 550

8 197

1 285

2 2042 407

219

1 0811 306

0

2 000

4 000

6 000

8 000

10 000

12 000

2007 2008 2009

Revenues EBITDA Net profit

Key Indicators Trends Key Indicators

Source: Company

$ mln

* includes leasingSource: Company. 2006-2007 financials under US GAAP, starting from 2008 – under IFRS

Financials

20

100213

309437

2 068

1 404

1 038965

1 6521 674

374

670

537659

-110

94219

-500

0

500

1 000

1 500

2 000

2 500

1Q09 2Q09 3Q09 4Q09 1Q10 2Q2010

Rev enues EBITDA Net prof it

BB, outlook positive(outlook changed from “stable” on Sep 17, 2010)

Ba3, outlook positive(outlook changed from “stable” on July 22, 2010)

MMK credit ratings

$ mln

21

ENRC

Investment Highlights

21

• Key beneficiary of steel market recovery – more than 60% production growth

within next 4 years

• Growing volumes and share of HVA products (50% by 2014) to secure

sustainably high efficiency

• Focus on specialty steel products to replace imports in Russia and to enjoy

domestic market price premium

• Access to lucrative Turkish flat steel market with high-quality steel products

• Emphasized direct exposure to growing industry sectors in the domestic

market – pipe-building, automotive and heavy machinery industries

• Technological flexibility to address raw-material market fluctuations – crude

steel production using iron ore/coking coal vs. scrap

• Strong balance to secure further growth

• Plans for further strengthening in commodities

Appendices

MAGNITOGORSK STEEL

811

1 161

1 447

1 154

1,611,17

2,57

4,13

0

2

4

6

8

10

0

500

1000

1500

ММК NLМК Severstal Evraz

EBITDA Debt/EBITDA

616

207

484

630624

0

100

200

300

400

500

600

700

2011 2012 2013 2014 2015 и далее

931 575 9891 756

1 966

5 303

6 180

1 949

1 1222 660

4 287

7 261

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

MMK NLMK Sev erstal Ev raz

$ mln

Short-term debt Long-term debt Net debt

Показатели Группы ММК в сравнении с конкурентами

Steel Companies’ Debt Loads Debt/EBITDA

MMK Group Indicators Compared to its Competitors

23

At 1 July 2010

Maturity of Long-term Borrowings

$ mln

Source: Company data, 6 months 2010Source: Company data, 6 months 2010

$ mln

Source: MMK

400

1 224 1 295828 931

606

230431 1 290

1 949

0

500

1 000

1 500

2 000

2 500

3 000

3 500

2006 2007 2008 2009 1H2010

Short-term debt Long-term debt

Debt Structure by Maturity$ mln

At 1 July 2010

MMK-Atakas Production PlanTo

tal P

rodu

ctio

n,

‘000

tons

per

yea

rPr

oduc

tion

Cap

acity

, ‘0

00 to

ns p

er y

ear

Source: MMK estimates 24

Total: 2 252 kt

100

60

HR

gal

vani

zed

Pol

ymer

s in

shee

ts

Hot Rolled Coil Mill2,317

Pickling Aggregate

1,165

Cold Rolled Coil mill759

Galvanizing Line867

636 460 300 196

Gal

vani

zed

coil

Color-coating line403

160 340

2,252

Gal

vani

zed

coil

Pol

ymer

s In

coi

l

1,096 300 456 400

Hot

rolle

d co

il

Hot

rolle

d sh

eet

HR

pic

kled

coil

coil

20%

62%

18%

Hotrolled steel

Galvanized flatproducts

Color-coated rolledproducts

Finished Products Structure

Question Answer

How much is MMK vertically integrated?

MMK has been most active in increasing its vertical integration in the last 12 months. Iron ore: MMK is 100% covered with stable supplies of iron ore. 30% comes from captive sources (up from 20% in 2008), 70% comes under 10-year agreement with ENRC (till 2017). Options for the development of Prioskol depositCoking coal: through acquisition of Belon MMK has covered 50% of its requirement of coking coal to bring up the self-coverage rate up to 80% by 2013 through the development of Belon asset baseScrap: MMK owns the largest scrap collector in Russia – 100% self-sufficiency in scrapElectricity: 85% self-sufficiency.

What are growth plans of MMK in terms of volumes?

MMK presents highest growth bid among Russian steel names through existing leverage, organic growth and expansion projects – more than 60% by 2014.

How would you assess MMK corporate governance standards?

MMK pursues best corporate governance and disclosure practices (recognized by S&P as #3 in Russia for 2009). Half of the Board members are independent. 4 BoD committees are in place, HR & Remuneration Committee and Audit Committee are built entirely of independent directors.

Why does MMK focus its development strategy on the domestic market?

Domestic market suggests price premiums and best growth prospects. It is a privilege for MMK to be able to maintain high domestic sales volumes. It took a decade of technical overhaul to turn from a mere exporter (63% of overall production in 1999 was exported) to a key supplier to the domestic pipe industry, heavy engineering and automotive industry (domestic shipments stood at 65% in H1 2010).

How much can MMK benefit from infrastructure and construction recovery?

Besides indisputably high exposure to infrastructure and corporate spending in Russia due to high quality flat steel products (currently MMK supplies to construction of all the pipe-line projects of Gazprom and Transneft), MMK has the most modern in Europe facilities to produce 2 mtpy of the widest possible range of long steel products.

What are MMK exporting abilities?

MMK historically exported around 4.7 mtpa on average to customers in more than 60 countries. Given weaker demand in international markets this year the Company plans to export 3,6 mt in 2010. In terms of global expansion MMK finalizes its MMK-Atakas project in Turkey to produce 2.3 mtpa of finished steel goods in order to increase shipments to MMK key export region – Middle East – and get bigger exposure to the EU market.

Key Q&A

25

Contacts

THIS PRESENTATION IS FOR INFORMATION ONLY.•THIS PRESENTATION IS FOR DISTRIBUTION IN UK ONLY AMONG THE PEOPLE HAVING PROFESSIONAL SKILL IN THE ISSUES RELATED TO INVESTMENTS WITHIN THE MEANING OF ARTICLE 19(5) OF DIRECTIVE ON FINANCIAL ADVERTISEMENT APPROVED IN 2005ON THE BASIS OF LAW ON FINANCIAL SERVICES AND MARKETS 2000, OR THOSE PEOPLE, AMONG WHICH IT MAY BE LAWFULLY DISTRIBUTED. THIS INFORMATION IS CONFIDENTIAL AND PROVIDED TO YOU EXCLUSIVELY FOR YOUR REFERENCE. BY ACCEPTANCEOF THIS INFORMATION THE RECIPIENT HEREOF CONFIRMS THAT HE OR SHE IS A SPECIALIST IN THE SPHERE OF INVESTMENTS WITHIN THE MEANING OF ARTICLE 19(5) OF DIRECTIVE ON FINANCIAL ADVERTISEMENT APPROVED IN 2005 ON THE BASIS OF LAW ONFINANCIAL SERVICES AND MARKETS 2000, ACTING IN HIS OR HER NATURE.•THIS PRESENTATION DOES NOT CONSTITUTE AN OFFER OR A PART THEREOF, OR INVITATION TO SELL OR TO ISSUE, OR TO SUBSCRIBE FOR OR OTHERWISE PURCHASE ANY SHARES IN THE COMPANY OR ANY OTHER SECURITIES AND NOTHING CONTAINEDHEREIN SHALL FORM THE BASIS OF ANY CONTRACT OR COMMITMENT WHATSOEVER.•THE INFORMATION CONTAINED HEREIN IS SUBJECT TO VERIFICATION, COMPLETION AND MAY BE SIGNIFICANTLY CHANGED. NONE OF THE PERSONS IS LIABLE TO UPDATE OR MAINTAIN TOPICALITY OF THE INFORMATION CONTAINED HEREIN, AND THISINFORMATION AND OPINIONS REFLECTED THEREIN COULD BE CHANGED WITHOUT ANY NOTIFICATION THEREABOUT.•THIS PRESENTATION SHOULD REMAIN CONFIDENTIAL UNTIL THE REPORT IS PUBLISHED. SOME INFORMATION CONTAINED HEREIN IS STILL A DRAFT INFORMATION AND WAS NOT LEGALLY CONFIRMED AND WILL BE FINALY DETERMINED ONLY AT THE MOMENTOF FILING THE APPLICATION FOR FINAL ACCEPTANCE FOR TRADING AT THE STOCK EXCHANGE.•THIS INFORMATION DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES TO BE SOLD IN RUSSIA, THE UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF1933,AS AMENDED, AND MAY NOT BE OFFERED OR SOLD INTO THE UNITED STATES EXCEPT IN A TRANSACTION REGISTERED UNDER SUCH ACT, OR NOT REQUIRED TO BE REGISTERED THERE UNDER, OR PURSUANT TO AND EXEMPTION FROM REGISTRATIONREQUIREMENTS THEREOF. NO OFFERING OF SECURITIES IS BEING MADE INTO THE UNITED STATES. NO SECURITIES WILL BE REGISTERED UNDER THE APPLICABLE SECURITIES ACT OF ANY STATE OR TERRITORIAL ENTITY OF CANADA AND JAPAN. THISPRESENTATION IS NOT SUBJECT TO MAILING, TRANSFERRING OR OTHER TYPE OF DISTRIBUTION IN THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA AND JAPAN, OR TO THE TERRITORY OR FROM THE TERRITORY OF THE SPECIFIED COUNTRIES TO THENAME OF ANY ANALYST IN THE SPHERE OF SECURITIES OR OTHER PERSON IN ANY OF THE SPECIFIED JURISDICTIONS. YOU AGREE TO AVOID FROM DISTRIBUTION OF ANY REPORT RESULTING FROM THE SURVEY OR SIMILAR DOCUMENTS ON THE TERRITORYOF THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA AND JAPAN, SAVE AS IN ACCORDANCE WITH THE FEDERAL LAWS OF THE UNITED STATES ON SECURITIES INCLUDING SECURITIES ACT, AS WELL AS THE APPLICABLE LAWS OF CANADA, AUSTRALIA ANDJAPAN, ACCORDINGLY.•THIS PRESENTATION INCLUDES THE STATEMENTS RELATED TO THE FUTURE, WHICH REPRODUCE THE INTENTIONS, OPINIONS AND CURRENT EXPECTATIONS OF THE COMPANY. THE STATEMENTS FOR THE FUTURE INCLUDE ANYTHING, WHICH IS NOT A FACTOCCURED. THE COMPANY TRIED TO HIGHLIGHT SUCH STATEMENTS RELATED TO THE FUTURE BY MEANS OF THE WORDS, SUCH AS “MAY”, “WILL”, “SHOULD”, “EXPECT”, “INTEND”, “EVALUATE”, “ASSUME”, “PLAN”, “TO HAVE AN OPINION”, “TRY”, “FORECAST”,“CONTINUE” AND SIMILAR WORDS OR THEIR NEGATIVE FORMS. SUCH STATEMENTS HAD BEEN DONE BASING ON THE ASSUMPTIONS AND ASSESSMENTS, WHICH MAY OCCUR FAULTY, THOUGH THE COMPANY CONSIDERS THEM REASONABLE AT THE CURRENTMOMENT.•SUCH STATEMENTS RELATED TO THE FUTURE ARE LINKED TO THE RISKS, UNCERTAINTIES AND ASSUMPTIONS, AS WELL AS TO OTHER FACTORS, WHICH MAY LEAD TO THE EVENT THAT ACTUAL RESULTS OF THE COMPANY’S ACTIVITY AND ACTIVITY OF THEMARKETS, ON WHICH IT OPERATES OR INTENDS TO OPERATE IN, THEIR FINANCIAL STATUS, LIQUIDITY, CHARACTERISTICS, PROSPECTS AND ABILITIES COUILD MATERIALLY DIFFER FROM THOSE, WHICH ARE EXPRESSED WITH THE HELP OF SUCH STATEMENTSRELATED TO THE FUTURE. THE IMPORTANT FACTORS, WHICH MAY RESULT IN SUCH DIFFERENCES, INCLUDE, INTER ALIA, CHANGING BUSINESS CONDITIONS AND OTHER MARKET CONDITIONS, COMMON ECONOMIC CONDITIONS IN RUSSIA, EU COUNTRIES, THEUNITED STATES OF AMERICA OR ANYWHERE ELSE, AS WELL AS THE ABILITY OF THE COMPANY TO MEET THE TRENDS IN THE INDUSTRY. THE MATERIAL DIFFERENCE OF THE ACTUAL RESULTS, FEATURES AND ACHIEVEMENTS MAY BE THE RESULT OFADDITIONAL FACTORS. THE COMPANY AND ALL ITS DIRECTORS, OFFICERS, EMPLOYEES AND ADVISORS HEREWITH STATE THAT THEY ARE NOT OBLIGED TO ISSUE ANY UPDATE OF OR REVISE ANY STATEMENTS RELATED TO THE FUTURE CONTAINED HEREIN,OR DISCLOSE ANY CHANGES IN THE FORECASTS OF THE COMPANY OR EVENTS, CONDITIONS AND CIRCUMSTANCES, WHICH SUCH STATEMENTS RELATED TO THE FUTURE ARE BASED ON, SAVE AS IN THE CASES PROVIDED FOR BY THE APPLICABLE LAWS.•RECEIPT OF ANY COPY OF THIS INFORMATION TESTIFIES THE ACCEPTANCE OF THE ABOVE LIMITATIONS.

Disclaimer

26

GDR Depositary - BNY MellonContact person at the depositary Ludmila Leliavskaia Vice PresidentTel 212.815.4493 ludmila.leliavskaia@bnymellon.com

MMK (Magnitogorsk Iron & Steel works) Ordinary shares listed at MICEX and RTS in June 2006. GDRs listed at LSE in April 2007ISIN / СUSIP US5591892048/559189105

Evgeny Kovtunov Head of IRTel +7 (3519) 24 93 55 kovtunov@mmk.ruMobile +7 909 747 99 00 www.mmk.ru

Contacts at MMK

TickersMICEX, RTS: MAGNLSE: MMKBloomberg: MMK:LI

Dmitry Usanov Director for Capital MarketsTel +7 (495) 662 35 52 usanov@mmk.ruMobile +7 985 998 75 61 www.mmk.ru