Moscow, Russia – December 21, 2004 – Mechel (NYSE: MTL) announces results of an Extraordinary General Shareholders' Meeting held on December 20, 2004.

The Shareholders' Meeting of the Company approved a major transaction to purchase shares of Magnitogorsk Iron and Steel Works owned by the Russian Federal Property Fund at the auction on December 22, 2004, for the amount sufficient to win at the auction, but not exceeding the sum equivalent to US$2,150,000,000.00 (United States Dollars Two billion one hundred fifty million and 00 cents).

Other issues approved by the Shareholders' Meeting include other material conditions of the transaction: a deposit to the seller of shares in the amount and according to the procedure determined by the auction regulations; filing an application in compliance with the form established by the seller; conclusion of a shares sale and purchase agreement in compliance with the appropriate legal procedure within five days from the date of the auction's results; and payment for the shares in compliance with procedure and dates to be stipulated by the shares sale and purchase agreement.

***

Irina Ostryakova
Director of Communications
Phone: 7-095-258-18-28
Fax: 7-095-258-18-38
irina.ostryakova@mechel.com

***

Mechel Steel Group is a Russian metals and mining company, uniting producers of steel, rolled products, hardware, coal, iron ore concentrate, and nickel. Mechel Steel Group products are marketed domestically and internationally.

***

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Mechel Steel Group, 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 are only predictions and that actual events or results may differ materially. We do not intend to update these statements. We refer you to the documents Mechel Steel Group files from time to time with the U.S. Securities and Exchange Commission, including our Form F-1. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in our Form F-1, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, the achievement of anticipated levels of profitability, growth, cost and synergy of our recent acquisitions, the impact of competitive pricing, the ability to obtain necessary regulatory approvals and licenses, the impact of developments in the Russian economic, political and legal environment, volatility in stock markets or in the price of our shares or ADRs, financial risk management and the impact of general business and global economic conditions.