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MAGNITOGORSK IRON & STEEL WORKS MAGNITOGORSK IRON & STEEL WORKS Organic Growth Strategy Organic Growth Strategy Presentation for Investors Presentation for Investors November 2009 2009 November MMK highlights 23 in the global

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SLIDE 1

Organic Growth Strategy Organic Growth Strategy

November November 2009 2009

MAGNITOGORSK IRON & STEEL WORKS MAGNITOGORSK IRON & STEEL WORKS

Presentation for Investors Presentation for Investors

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SLIDE 2

2

MMK highlights

ENRC № 23 in the global 2008 steel-makers rating; № 1 among crude and finished steel producers in Russia, MMK share of the domestic market in 2008 – 20%; Conservative strategy with focus on organic growth; The broadest products range among Russian and CIS peers; The largest stand-alone production site in Russia; Unique plate mill facilities - Plate Mill 5000 complex; The acquisition of Belon coal company secures supplies of coking coal (including those of deficit grades) to MMK; Low debt level: Debt/EBITDA – 0,78х (as of Dec 31, 2008); BB/Ba3/ВВ credit ratings (S&P/Moodys/Fitch); MMK shareholders’ structure: 87% - beneficially owned by Chairman of MMK Board of Directors (Victor F. Rashnikov), 13% - free float (LSE, MICEX, RTS); GDRs listed on London Stock Exchange.

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SLIDE 3

3

MMK assets geography

Белон

Single-site production complex in Magnitogorsk Mining and processing assets, including Belon ZAO Profit - the integrated network of scrap collectors Metal-service centers network International assets: ММК–Atakas (Turkey)

ММК-Метиз

Moscow MMK-Metiz SSGPO ENRC Kazakhstan Belon Kuznetsk coal basin

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SLIDE 4

4

MMK products

  • Hot-rolled sheet

5.66 mln tons (51,9%)

  • Cold-rolled sheet

1.36 mln tons (12,5%)

  • Long products

1.58 mln tons (14,5%)

  • Downstream

1.36 mln tons (12,5%)

  • Billets ang slabs

0.95 mln tons (8,7%)

Further application of MMK products

Picture Picture Picture Picture

MMK products, 2008 Products of Plate Mill 5000 Further application of Plate Mill 5000 products

  • Steel plates, up to 4800 mm wide, strength class up to

X120

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5

MMK key advantages

Broad product mix Successful crisis- management programme Low debt level Competitive edge in costs High level of self- sufficiency in raw materials and electricity Modernized assets base

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6

Leading positions in the industry

ENRC

MMK share in Russia's total 1 Products 52% 42% HR flat products 21% Color-coated rolled products 1% 26% Galvanized flat products 30% CR flat products 53% CR narrow strip 4% 100% Tin plate 2% 12% 3% 55% Special sections 2% 1 1 1 2 3 3

Leading positions in HVA products

% of MMK production 5000 7000 9000 11000 13000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 MMK Severstal NLMK

The leader in finished steel production

18% 14% 5% 9% 8% 6% 3% 17% 20%

MMK Severstal NLMK Ural Steel ZSMK NTMK ChMK NKMK Others

No 1 in Russian steel production

  • th. tons

№ 1 in Russia in finished steel products The leader among high value added steel producers The largest Russian steel producer. Domestic market share - 20% № 1 in Russian flat steel production The leader among special steel types producers

Sales strategy

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7

Efficient sales policy

ENRC

Sales breakdown by region

1H09 8% 7% 2% 12% 64% 7% Asia and Far East China Middle East Italy Other Export markets Domestic market

Sales structure by products, 1H09 Sales strategy

50 100 150 200 250 300 350 400 450 500 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09

USD/t

  • Th. tons
  • 1500
  • 1000
  • 500

500 1000 1500 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Billets and Slabs HRC CRC Long products Dow nstream

Domestic market Export % shipped to domestic market

Total: 2 003 mln USD

Source: ММК

Domestic market premium

Domestic market takes the largest part of MMK

  • sales. It allows MMK to get the domestic market

price premium - up to 15-20% (in comparison with export) The largest part of HVA products sales are on the domestic market MMK expands access to perspective export markets - Middle East, Asia

Source: ММК

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8

FY08

50% 21% 12% 17%

Long products HRC CRC Downstream

Strong domestic market position

ENRC

Domestic market sales structure by products Industrial sales distribution, 2008

26,5% 6,1% 0,2% 2,0% 27,5% 13,2% 15,3% 9,2%

Spot sales Pipe manufacturing Machinery-building Metalware and processing Automotive industry Construction Food industry Bridge construction

Total: 7 155 th. tons

Domestic market growth strategy

Increase of high-value added products output Creation of metal-service centers network and effective logistics system Integration with MMK products consumers Ural, Siberia, Volga are major domestic regions

  • f MMK

1000 2000 3000 4000 5000 6000 7000 8000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Domestic market, CIS Export

3 722 2 141 7 155 3 755

Domestic market sales dynamics

  • Th. tons
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Access to growing export markets

ENRC

Export market strategy Sales structure by region

FY08 10% 7% 66% 1% 3% 13% Asia and Far East Middle East Europe Africa North America Domestic market

Export sales structure by products

FY08 1,5% 25% 56% 13% 4% Billets and Slabs Long products HRC CRC Downstream

Total: 3 755 th. tons 49% 50% 54% 60% 66% 51% 50% 46% 40% 34% 0% 50% 100% 2004 2005 2006 2007 2008 Domestic market Export

Domestic/Export sales

Key export regions - fast growing markets of Middle East, Asia and Pacific Rim MMK expands access to perspective export markets by building new mills and metal-service centers Flexible export market sales

Total: 10 911 th. tons

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10

68,47 31,26 10 20 30 40 50 60 70 80 2008 Purchased electricity price Cost if internally produced electricity

Sufficiency in Electricity, Iron Ore and Coal

ENRC

Self-sufficiency in electricity, 2008 MMK’s unique position in electricity self-sufficiency

Source: ММК, Deutsche Bank

119%

76% 43% 40% 55% 24% 57% 60% 45% 0% 50% 100% MMK Sev erstal NLMK Ev raz

In house generated Outsourced US$ / th. kWatt*Hrs

Coal supplies structure

14% 25% 26% 28% 32% 29% 86% 75% 74% 72% 68% 71% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 Belon supplies Long-term contracts 16% 19% 19% 29% 27% 29% 84% 81% 81% 71% 73% 71% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 Own Iron ore Long-term contracts

Iron ore supplies structure

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11

578 795 856 387 243 334 2067 2846 3060 989 801 829 500 1000 1500 2000 2500 3000 3500 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09

mln USD

0% 10% 20% 30% 40% 50% 60% 70% HVA sales Ov erall production HVA share

Effective crisis-management programme

ENRC

5 000 10 000 15 000 20 000 25 000 30 000

июл.08 авг.08 сен.08 окт.08 ноя.08 дек.08 янв.09 фев.09 мар.09 апр.09 май.09 июн.09

200 400 600 800 1 000 1 200 Finished steel production Production cost (per ton) Av erage price

Profitability dynamics Slab cash-cost and raw material price dynamics Key measures

Re-negotiation of raw-material prices with key suppliers Increase of in-house production of raw materials Decrease of consumption ratios Optimization of production portfolio

RUR/t

HVA share in production portfolio

  • th. tons

306 321 448 552 449 207 208

100 200 300 400 500 600 2007 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09

  • 100%
  • 50%

0% 50% 100% 150% 200%

Slab cash-cost, USD/t Iron ore, % Coal, % Scrap, %

USD/t

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Investment programme

ENRC

2000 4000 6000 8000 10000 12000 14000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Crude steel Finished steel 6 688 10 911 5 863 11 957

  • th. tons

300 600 900 1200 1500

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

945 621 524 1 595

Crude steel and finished steel production dynamics CAPEX dynamics, mln. USD

  • Doubled production growth
  • Product mix expansion, quality improvement
  • Increased downstream processing
  • Lowered consumption ratios
  • Enhanced production efficiency

Source: ММК

Effect of the investment programme

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Plate Mill 5000

ENRC

Project completion time under SMS Demag contract: 32 months Investments: USD 1.4 billion Construction pipeline:

  • Nov. 7, 2006: signing of the contract
  • Nov. 2007: foundation works

2008: construction of the building, erection and installation May 2009: functional tests July 2009: rolling of the first plate

Only 8 companies (located in Germany, France and Japan) are able to produce plate with comparable characteristics

12 Rolling force, kt 2009 Year of start-up 24 Length, m 8-160 Thickness, mm up to X120 Strength class up to 4 800 Width, mm 1,5 Capacity, mtpa Characteristics Further application of Plate Mill 5000 products

Plate Mill 5000 products have a number of technological certificates to meet requirements of key customers

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Automotive CR Sheet, Intercos-IV

ENRC

0,28 - 3,0 Thickness, mm HSLA, IF-HSS, BH, two- phase, multiphase, ТRIP Steel grades 850-1880 Width, mm 2000 Capacity, kt Mill 2000 Main Characteristics MILL 2000 - AUTO BODY SHEET PRODUCTION Implementation of the Project will allow to produce high quality auto body sheet meeting the requirements of international auto makers (GM, Ford, Toyota, etc ) Contract signed with SMS Demag on equipment supply

  • n 13.07.07

Project parameters Objective: Sales of 300 th th.tpy of MMK CR galvanized flat products in North-West Russia region. The target should be reached by building stamping mill for automotive companies and household appliances producers Result: Construction of a metal service centre and a stamping mill in Kolpino, with total production volume of 300 ktpy of CR sheet and galvanized flat products Project completion time - 2,5 years. Intercos-IV project geography

Intercos-IV

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Access to the Growing Turkish Market

ENRC

Выход на быстрорастущий рынок Турции

Project geography, Turkey Consumption by products, kt Flat products production/consumption balance, kt

5 040 5 500 5 646 8 245 11 667 2 028 2 213 2 271 3 317 4 694 1148 1253 1286 1879 2658

3000 6000 9000 12000 2004 2005 2006 2010E 2015E

HR sheet CR sheet Coated sheet

ММК – Atakas Project

  • Production capacity :
  • 2 300 ktpy of HR sheet
  • 750 ktpy of CR sheet
  • 900 ktpy of galvanized coils
  • 400 ktpy of polymer coated sheet
  • 2 service centers :
  • 340 ktpy
  • 340 ktpy

Istanbul

7,9 9,0 9,9 11,1 10 10,1 11,6 12,6 3,7 3,8 3,9 4,2 5,5 5,5 6,5 7,8

  • 4,2
  • 5,2
  • 6,0
  • 6,9
  • 4,5
  • 4,6
  • 5,1
  • 4,8
  • 8,0
  • 4,0

0,0 4,0 8,0 12,0 16,0 2004 2005 2006 2007 2008 2009E 2010E 2011E

Consumption Production Balance

Source: CSFB report, 02 July 2009, ING report 30 September 2009 Source: CSFB report, 02 July 2009, ING report 30 September 2009

Iskanderun

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Crude steel output

MMK long-term investment programme

ENRC

Finished steel output

  • Start-up of HDGL2 with a capacity of 450 ktpy
  • Increase of hot-rolling mill 2000 productivity by 500 ktpy
  • Plate Mill 5000 start-up
  • Colour-coating line #2 start-up
  • Start-up of continuous slab casting machine
  • Plate Mill 5000 to reach full capacity of 1,5 Mtpy
  • CR shop #5 grinding machine replacement
  • Coke-oven battery reconstruction
  • Blast-furnace shop reconstruction
  • Energy generating facilities expansion
  • Cold-rolling Mill 2000 start-up. Production of cold rolled and

galvanized steel for auto sector

  • Reconstruction of cold-formed sections production.
  • Cold rolling mill 2000 reaches full capacity
  • Hot-rolling mill 2500 modernization

Expected finished steel output

Increased Efficiency + Increased Capacity

2008 2009 2010 2011 2012 2013

12.0 mln t. 13..2 mln t. 13.2 mln t. 14.3 mln t. 14.3 mln t. 13.3 mln t. 14.3 mln t. 13.3 mln t. 14.3 mln t. 10.9 mln t. 8.6 mln t. 12 mln t. 13 mln t. 13 mln t. 13.3 mln t. 14.3 mln t. 13 mln t. 13.3 mln t.

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Increasing exposure to HVA products

30% 34% 38% 54% 30% 25%

2 000 4 000 6 000 8 000 10 000 12 000

2008 2009 2010 2011 2012 2013

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Downstream products Cold-rolled products Wide plates (Mill 5000) Other products HVA share, % 2 721 2 575 3 610 4 402 4 887 7 047

  • th. tons
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2Q09 1Q09 FY08 FY07 FY06 Crude steel, th. tons 2 159 2 070 11 957 13 261 12 455 Finished steel, th. tons 1 919 1 917 10 911 12 203 11 346 Sales, mln USD 1 038 965 10 550 8 197 6 424 EBITDA, mln USD 207 99 2 204 2 407 2 005 EBITDA margin, % 20% 10% 21% 29% 31% Net income, mln USD 59

  • 110

1 081 1 306 1 426 Net margin, % 6%

  • 11%

10% 16% 22% Assets mln. USD 13 068 12 179 14 197 15 887 5 689 Borrowings, mln. USD 1 589 1 653 1 681 1 398 950 STD 880 1 103 1 276 1 198 373 LTD 709 555 405 200 577 Share equity, mln. USD 9 424 8 469 9 852 11 786 4 027 Cash & equivalents, mln. USD 625 907 1 106 256 338

Financial highlights

6424 8197 10550 2005 2232 2204 1426 1306 1081

  • 1000

1000 3000 5000 7000 9000 11000 13000 2006 2007 2008 1Q2009 2Q2009

Sales EBITDA Net Income

ENRC

Key figures dynamics Key figures

Source: MMK consolidated Statements

млн. US$

Source: MMK consolidated Statements (2006-2007 under US GAAP, 2008 under IFRS)

International credit ratings BB, stable BB, negative Ba3, stable

Rating, outlook Agency

965 1038 99 207

  • 110

59

  • 200

800 1800 2800

1Q2009 2Q2009

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19

1726 3174 8332 10041 9663 8690 9048 4738

2000 4000 6000 8000 10000 12000 MMK NLMK Sev erstal Ev raz

mln USD

0% 50% 100% 150% 200%

Total Debt Equity Debt/Equity

Key figures of MMK and peers

4 538 6 323 2 204 5 366

1000 2000 3000 4000 5000 6000 ММК NLMK Sev erstal Ev raz 0,5 1 1,5 2

EBITDA Debt/EBITDA

1 295 1 080 1 978 3 922 1 930 6 278 6 064 431 1 014 603 4 860 9 111 2000 4000 6000 8000 10000

ММК NLMK Sev erstal Evraz mln USD

STD LTD Net debt

Russian steel companies debt level Total Debt/Equity Debt/EBITDA

20,9% 10,3% 19,9% 21,6% 10,2%

  • 11,4%

5,7% 29,4% 30,4% 22,2%

  • 15%
  • 10%
  • 5%

0% 5% 10% 15% 20% 25% 30% 35%

2006 2007 2008 1Q2009 2Q2009 EBITDA Margin Net Margin

Margin dynamics

Source: Companies data, 2008 Debt includes leasing Source: MMK consolidated financial statements Source: Companies data, 2008 Debt includes leasing Source: Companies data, 2008 Debt includes leasing

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201 71 151 286 508 200 400 600

1st y ear 2nd y ear 3d y ear 4th y ear 5th y ear and futher

Debt level

373 1 198 1 276 880 577 200 405 709 300 600 900 1200 1500 2006 2007 2008 1П2009

STD LTD

ENRC

Debt level Debt structure by maturity

Source: MMK consolidated statement

  • mln. US$

Source: MMK estimates

Long-term debt repayment schedule Debt level remains low Short-term debt decreased in 1H09; 3/4 of debt is nominated in USD 90% of debt has a floating interest rate, which allows to lower cost of MMK debt after decline of LIBOR More than 50% of short-term debt is built up by revolving credit lines

As of June 30, 2009

Security and covenants About 56% of debt is unsecured The following covenants are set for large loans : Debt/EBITDA below 3,5 EBITDA/Rates above 3 Total Debt/Equity below 1.

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SLIDE 21

21 Coal mines inventories, mln tons

Mining facilities

Belovskaya

2008 output - 4 977 th tons 1H09 output - 2 618 th tons

Total: 630 mln tons

Auxiliary enterprises Processing facilities

Belon structure

11 steel trading centres + 15 ware houses

Listvyajnaya

2008 output - 2 812 th tons 1H09 output - 1 328 th tons

2008

steam coal - 2 634 th tons coking coal - 2 889 th tons

1H09

steam coal - 1 312 th tons coking coal - 1 810 th tons

Acquisition of Belon to boost efficiency

10 84 43 260 11 156 66

Chertinskaya-Koksovaya Chertinskaya-Yujnaya Razrez Novobochatskiy Kostromovskaya Prisalairskaya polosa Listvyjnaya Erunakovskiy-2

Source: MMK outlook

Enrichment plant Belovskaya

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  • St. Petersburg

Moscow Archangelsk Belgorod Magnitogorsk Irkutsk Krasnoyarsk Tomsk Novosibirsk

Razrez Novobochatskiy Erunakovskiy Chertinskaya mone Belovskaya enrichment plant Novaya mine Listvayjnaya mine Kostomovskaya mine Listvyajnaya enrichment plant

Kemerovo

Belovo

Compact space (radius 60 km) – effective management and logistics

  • Belon covers MMK requirement in coking and power-generating coal.
  • Stable coal charge mix, decrease of coke consumption ratio.
  • Natural hedging of MMK financial results because of fluctuating of coal

concentrate prices.

  • Expansion of steel-trading in the regions of Belon’s presence.

Benefits for MMK

Coking coal mine Power-generating coal mine Concentrating mill Transporting distance – 2125 km. Metal-sales centers

Geography of Belon assets

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23

1255 1735 2002 2889 3986 5130 4920 5280 6790

1000 2000 3000 4000 5000 6000 7000 8000 2005 2006 2007 2008 2009 2010 2011 2012 2013

Coking coal enrichment plant Belovskaya

Source: ММК estimates

Coking coal concentrate output, th. tons Coking coal output, th. tons Investment programme objectives

3550 2750 3379 3150 3340 4340

500 1000 1500 2000 2500 3000 3500 4000 4500 5000 2008 2009 2010 2011 2012 2013

Implementation of the programme will allow to:  increase coking coal production up to 7 mt by 2013  increase coal concentrate output to 4,3 mt by 2013  increase profitability through running enrichment plants with captive coal only  meet safety standards

Belon development prospects

Source: ММК estimates Source: ММК estimates

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Disclaimer

ENRC

  • 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 2005 ON 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 ACCEPTANCE OF 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 ON FINANCIAL SERVICES AND MARKETS 2000, ACTING IN HIS OR HER NATURE.

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PURCHASE ANY SHARES IN THE COMPANY OR ANY OTHER SECURITIES AND NOTHING CONTAINED HEREIN SHALL FORM THE BASIS OF ANY CONTRACT OR COMMITMENT WHATSOEVER.

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  • THIS PRESENTATION SHOULD REMAIN CONFIDENTIAL UNTIL THE REPORT IS PUBLISHED. SOME INFORMATION CONTAINED HEREIN IS STILL A DRAFT

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