The 10th Central and Eastern European Steel Conference, which took place during September 18 - 20 in Bucharest, Romania, was organized by Metal Bulletin, one of the major international publishers in metal industry. The conference analyzed the development of steel markets and production in the Central and Eastern European countries, the outlook for industry consolidation, and investments in the development of distribution networks and new technologies.

On the first day of the conference, Mechel Senior Vice President Victor Trigubko presented Mechel’s experience in extricating its Romanian steel assets (Mechel Targoviste and Mechel Campia Turzii) from the heavy market downswing and decapitalization to improve profitability and meet modern requirements for production technology. These experiences, including fulfillment of the privatization obligations ahead of schedule, were acknowledged by the business community with operations in the region as worthy of attention.

As part of the presentation, Mechel arranged a field trip for the conference delegates to Mechel’s Targoviste steel plant on September 20. Attending delegates included approximately 40 businessmen, international and local business media journalists, and representatives of the government authorities including P. Ianc, General Director, General Directorate for Industrial Policy and Competitiveness, Ministry of Economy and Finance; M. Toader, General Director, General Division for European Affairs, Ministry of Economy and Finance; ?. Berinde, Deputy General Manager Romcontrol S.A.; M. Nistor, Subprefect of Targoviste; M. Dobresku, General Manager of Metallurgical Research Institute, Romania; and I. M. Sidorov, Counselor for Commerce and Economics, Russian Embassy in Bucharest.

During the tour of the plant, its General Director, Vyacheslav Shmyga, presented the projects already implemented at the plant including the continuous casting machine with the capacity of 500 thousand tonnes a year commissioned in March of this year; the upgraded complex of electric arc furnace and small-section mill heating furnace; the medium-section mill to be completely reconstructed in 2009; and other modern equipment. Mr. Shmyga completed the plant tour with his description of the plant development outlook and planned investments.

Mechel expects to invest approximately $35.0 million to modernize Mechel Targoviste through 2011. The plan for 2007 includes an increase of the steel output and sales to more than 480 thousand tonnes and about 440 thousand tonnes, respectively. In line with the objectives of Mechel's capital investment program, significant investments will be made in arrangements to reduce production costs and increase steel quality at Mechel’s steel subsidiaries.