Mechel closes Targoviste privatization contract

The Russian steelmaker Mechel announced that it has officially received the confirmation from the Romanian Authority of State Recovery of the fulfillment of all its obligations regarding its purchase of the Romania-based Mechel Targoviste. Mechel has met its entire investment requirement regarding its four investment years and fulfilled the fifth investment year nine months in advance, investing a total of $38 million as of August 31, 2006, under the Mechel Targoviste privatization contract, which was concluded in August 2002. Mechel has also resolved all social issues with the trade union. All these accounted for the early closure of the privatization contact. In addition, Mechel foresees a $35 million-worth 2006-2009 investment program for its Romanian subsidiary, which includes an updating of the electric furnace in order to reduce production costs and an upgrade of the continuous caster to increase the mill's billet production to 500,000 mt a year.