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Mechel begins work on the development of the Sivaglinsky iron ore deposit

Press Releases
September 9, 2021

Mechel begins work on the development of the Sivaglinsky iron ore deposit

Moscow, Russia - September 09, 2021 - Mechel PAO (MOEX: MTLR, NYSE: MTL), a leading Russian mining and the metallurgical company informs about the development of design estimates and permits for the start of the development of the Sivaglinsky iron ore deposit. By the end of 2022, about 2 billion rubles will be allocated for the implementation of this project. The field will be mined by open pit mining.

The Sivaglinskoye iron ore deposit is located 135 kilometers north of Neryungri and 9 kilometers from the railway line adjacent to Baikal-Amur Mainline. A 110 kV power transmission line from the Neryungrinskaya SDPP runs 3 kilometers from the field. At a distance of 8 kilometers is the Pionerskoye iron ore deposit, the mining license for which is also owned by Mechel, which in the long term will make it possible to create a single enterprise.

The area of ​​the Sivaglinsky deposit is 2.2 square kilometers, the reserves for opencast mining are 21 million tons of ore, the average iron content is 48.6-53.3%. During its development, among other things, it is planned to use the material and technical base of Yakutugol Holding, which is part of the Mechel Group.

Geological exploration work has now been completed with a total cost of 385 million rubles. Industrial tests for the processing of ore from the Sivaglinsky deposit at the Chelyabinsk Metallurgical Plant have been successfully passed. Procurement procedures are underway to purchase the necessary mining and transport equipment. It is planned to start pilot production of the Sivaglinskoye deposit in the 4th quarter of 2022, the volume of production by the end of 2022 is expected to be at the level of 300-400 thousand tons of blast-furnace and sinter ores. From 2023, annual production will amount to about 1 million tons, and with the commissioning of the Pionerskoye deposit, the total production capacity will reach 3.5 million tons of ore.

“According to our estimates, the agglomeration and blast furnace ores of the Sivaglinskoye deposit are almost ready commercial products. With the start of its development, Mechel Group will be able to increase the rate of self-sufficiency in iron ore raw materials up to 60%, that is, by about 15-20%. Investments in the project during 2021-2022 will amount to about 2 billion rubles. We expect to launch a large iron ore enterprise, which will become one of the industry leaders in the Far Eastern Federal District, ”commented Mechel PAO Oleg Korzhov, General Director.

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Mechel PAO »Ekaterina Videman Tel .: +7-495-221-88-88ekaterina.videman@mechel.com

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Mechel is a global mining and metallurgical company. The company's products are supplied to Europe, Asia, North and South America, Africa. Mechel unites producers of coal, iron ore, steel, rolled products, ferroalloys, heat and electricity. All businesses operate in a single production chain: from raw materials to high value-added products.

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Certain statements in this press release may contain assumptions or forecasts regarding future events or the future financial performance of Mechel PAO in accordance with the provisions of the 1995 US Securities Litigation Reform Act. We would like to warn you that these statements are only assumptions, and the actual course of events or results may differ materially from those stated. We do not intend to revise or update these statements. We refer you to the documents that Mechel periodically submits to the US Securities and Exchange Commission, including the Annual Report on Form 20-F. These documents contain and describe important factors, including those identified in the "Risk Factors" section and "Note on the forecasts contained in this document" in Form 20-F. These factors could cause material differences between actual results and our assumptions and forecasts regarding upcoming events, including but not limited to achieving the anticipated level of profitability, growth, cost and effectiveness of our recent acquisitions, the impact of competitive pricing, the ability to obtain the necessary regulatory approvals and confirmations. the state of the Russian economy, the political and legal environment, volatility in stock markets or the value of our shares or ADRs, financial risk management and the impact of the general business situation and global economic conditions.

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