Mechel announces that BMK has repaid all its obligations to the Federal Reserve Fund of the Russian Federation under a target loan agreement

Mechel announces that BMK has repaid all its obligations to the Federal Reserve Fund of the Russian Federation under a target loan agreement

August 4, 2021

Mechel announces that BMK has repaid all obligations to the Federal Reserve Fund of the Russian Federation under the target loan agreement

Beloretsk, Russia - August 4, 2021 - Mechel PAO ( MOEX: MTLR, NYSE: MTL), a leading Russian mining and metallurgical company, announces that Beloretsk Metallurgical Plant (BMK JSC, part of Mechel Group) has repaid all obligations to the RF Industrial Development Fund under a target loan agreement for the implementation of a production project multi-strand ropes.

A preferential loan in the amount of 255.3 million rubles was provided by BMK in 2016 for 5 years. It accounted for half of the cost of the project to organize the production of steel multi-strand ropes for industrial equipment, bridge and shipbuilding. The remaining 50% was invested by the company.

The funds raised from the FRP were used to purchase new lines for the production of ropes and their coating with polymer. The equipment was launched in 2018. This made it possible for the plant to launch new products - multi-strand ropes with a number of strands from 6 to 12 and diameters from 22 to 90 mm, including those with a polymer coating. Before that, there was no technological capability in Russia to produce 12-strand ropes and ropes with a diameter of more than 70 mm.

The uniqueness of the project lies in the composition of the polymer sheath of the rope, since its ready-made formula did not exist in Russia. The specialists of the plant, together with research institutes, have developed an original composition of the polymer coating. Plastic protects the product from wear and tear, dynamic loads, aggressive environments and adverse climate effects. As a result, ropes last almost twice as long as uncoated ropes. This allows consumers of this type of product to reduce the downtime of excavators and other equipment, to reduce the cost of its operation and repair, to increase the overall economic efficiency of units and machines.

Today, BMK products successfully replace imported counterparts in the Russian market. Such ropes are used in lifting equipment, bearing elements of suspension bridges, coal and mining industries, gas and oil production, fishing, shipping.

“We have fully fulfilled all our obligations under the target loan agreement and express our gratitude to the Development Fund industry, which provided funds for the implementation of a promising import-substituting project for BMK. The products that the plant began to produce thanks to the new equipment are now in wide demand by domestic industrial companies and reduce their dependence on foreign components. Thus, the project served not only the development goals of the plant, but also the Russian economy, "commented Mechel PAO Oleg Korzhov, General Director.

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Mechel PAO Ekaterina VidemanTel .: +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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