MOSCOW, February 21 /PRNewswire/ --

Mechel OAO (NYSE: MTL), one of the leading Russian mining and metals companies, announces that it has signed a contract and is starting construction of a railway spur track to the Elga coal deposit (Yakutia).

The contract for designing and constructing the railway spur track to connect Ulak railroad station of the Baikal-Amur Mainline with the Elga coal deposit (Yakutia) was signed between Mechel and Transstroy Engineering Corporation, a subsidiary of Transstroy Design and Construction Company, on February 19.

The total length of the railroad will be approximately 315 kilometers. The railroad's design comprises about 420 engineering structures, including 194 bridges. The railroad's throughput capacity after completion of all construction stages will be 25.0 million tonnes annually.

Construction of the railroad is the first stage in the development of the Elga deposit, from which annual coal output is planned to reach about 30.0 million tonnes. Commissioning of the railroad for permanent operations will take place not later than September 30, 2010.

"This project is a key aspect of our plans to develop the promising Elga coal deposit, and is consistent with the implementation of Mechel's strategic program aimed at further growing its mining segment. The construction will be carried out in three phases. Concurrently with the railroad construction, development of the Elga deposit itself will start. This will enable Mechel to ensure the possibility to transport coal from the deposit simultaneously with the completion of the railroad Phase 1," Mechel Management OOO Chief Executive Officer Vladimir Polin commented.

Mechel is one of the leading Russian companies. Its business includes three segments: mining, steel, and power. Mechel unites producers of coal, iron ore concentrate, nickel, steel, rolled products, hardware, heat and electric power. Mechel 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, 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 files from time to time with the U.S. Securities and Exchange Commission, including our Form 20-F. 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 20-F, 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.

Mechel OAO, Ilya Zhitomirsky, +7-495-221-88-88, ilya.zhitomirsky@mechel.com