Key events: 2013

Customers

March

Metalloinvest and Severstal signed a three-year contract to supply up to 3 million tonnes of iron ore concentrate.

July

Metalloinvest and Chelyabinsk Pipe-Rolling Plant (ChelPipe) extended a long-term cooperation agreement on supplies of pipe billets and flat steel products.

September

Metalloinvest organised the first Hot Briquetted Iron (HBI) Application in Steelmaking: Technology, Financing and Markets conference at Lebedinsky GOK Over 60 representatives of leading CIS steelmaking companies, as well as Russian and international experts in steelmaking technology, financing, operations and market analysis, attended the conference.

November

Ural Steel hosted Metalloinvest’s Coordination Council. Russian bridge construction companies, steelwork producers and national research institutes took part in the event. The key topic of discussion at this meeting was prospects for further long-term cooperation between the conference participants in the supply of Ural Steel flat steel products to Russian bridge-builders.

Metalloinvest and Mefro Wheels Russia Plant Zainsk extended an agreement on cooperation for the supply of flat steel products to the international automotive industry for the production of car wheels.

Capital Markets

February

The Company issued rouble-denominated bonds worth RUB 10 billion (c. USD 330 million at a 2013 average nominal rouble-to-dollar exchange rate of 31.82) with a coupon rate of 8.9% per year, maturing in 2023 with early redemption in 2018. The proceeds were used to repay rouble bank loans.

April

Metalloinvest successfully issued Eurobonds for a total amount of USD 1 billion with a coupon rate of 5.625% per year, maturing in 2020. The funds raised were used to refinance USD 1 billion of the remaining USD 2.15 billion syndicated loan (PXF). Thus the Company significantly improved the maturity dates of its bonds, repaying USD 750 million and USD 250 million credit facilities in advance of maturity dates in 2014 and 2015, respectively.

July

The Board of Directors of the Moscow Interbank Currency Exchange decided to transfer the Company’s 02 and 03 series bonds, valued at RUB 10 billion and issued in February 2013, from the unlisted securities section to the B Quotation List of securities admitted to MICEX. As a result, all five of the Company’s interest-bearing non-convertible documentary bonds (Series 01, 02, 03, 05, 06) are now included into Quotation List B.

December

Metalloinvest and Sberbank signed an agreement to refinance credit facilities previously extended by the bank for RUB 55 billion. The new five- and seven-year credit facilities were drawn down in January 2014 to repay credit due to Sberbank in 2014-2015 and, therefore, did not increase the total debt of the Company.

Corporate Ratings

April

Fitch Ratings revised Metalloinvest’s rating outlook from ‘stable’ to ‘positive’ and reaffirmed its ‘BB-’ long-term issuer default rating.

Standard & Poor’s Ratings Services confirmed the Company’s long-term ‘BB-’ rating and ‘positive’ outlook.

Moody’s Investor Service raised the Company’s credit rating from ‘Ba3’ to ‘Ba2’ with a stable outlook.

Products and Technology

April

Metalloinvest signed a contract with a consortium made up of Siemens VAI Metals Technologies GmbH (Austria) and Midrex Technologies, Inc. (USA) to build a third HBI plant (HBI-3 Plant) at Lebedinsky GOK with a production capacity of 1.8 million tonnes per year. It will be the largest HBI plant in the world. Total investment in the project will amount to approximately USD 850 million.

June

As part of the programme to increase the efficiency of the Company’s mining and transport complex, Lebedinsky GOK and Mikhailovsky GOK received new high-load BelAZ trucks with a maximum load capacity of 220 and 160 tonnes. Previously, the maximum load capacity of trucks at the GOKs' open-pit mines had been 136 tonnes.

Ural Steel completed the planned decommissioning of its open-hearth production in order to increase economic efficiency and environmental safety.

August

Lebedinsky GOK and Mikhailovsky GOK received four of six Caterpillar dump trucks with a load capacity of 180 tonnes as part of the programme to increase the efficiency of the mining and transport complex. Two of the trucks began working in the open-pit mines in October 2013. The new equipment reduced unit costs, increased production efficiency and improved working conditions.

October

In order to improve production efficiency and to shift from square billet to merchant pig iron, which is currently more in demand, Metalloinvest increased Ural Steel’s pig iron casting capacity by 40% (to 1.9 million tonnes a year).

November

At the 14th technology section of Mikhailovsky GOK’s crushing and sorting plant, refitting work began to test oxidised quartzites beneficiation technology (testing of the equipment will begin in 2014).

December

Ural Steel completed the upgrade of Sintering Machine #4. The project aimed to increase sinter production efficiency. As a result of the modernisation, the plant’s production capacity increased by 10%, from 763,000 tonnes per year to a maximum level of 846,000 tonnes, and its equipment can now operate uninterrupted.

Product Quality Policy

February

Ural Steel confirmed that the quality management system at the plant complies with international standard ISO/TS 16949.

March

Ural Steel successfully completed a certification audit of the occupational health and safety management system at the plant for compliance with international standard OHSAS 18001:2007.

July

Oskol Electrometallurgical Plant (OEMK) confirmed that the environmental management system at the plant complies with international standard ISO 14001:2004.

October

Lebedinsky GOK confirmed the compliance of the occupational health and safety management system at the plant with international standard OHSAS 18001:2007.

Ural Steel successfully passed an audit of its steel products for compliance with European standards. TUV Thuringen e.V. (Erfurt, Germany) inspected steel products used in the manufacturing of vessels handling high pressures and in the European construction industry.

November

Lebedinsky GOK confirmed the compliance of the quality management system at the plant with international standard ISO 9001:2008, and the compliance of its environmental management system with the GOST R ISO 14001-2007 and МS ISO 14001:2004 standards.

OEMK confirmed the compliance of the quality management system at the plant with international standard ISO/TS 16949:2009.

December

Mikhailovsky GOK successfully passed an external audit of its Integrated Management System, which included a review of the quality management system for compliance with international standard ISO 9001:2008, occupational health and safety management system for compliance with international standard OHSAS 1800:2007, and the environmental protection system for compliance with international standard ISO 14001:2004.

Corporate Governance

February

On February 15, a new Metalloinvest Board of Directors was elected. Ivan Streshinsky and Irina Lupicheva joined the Board. Lupicheva is the first woman to serve on the Company’s Board.

March

Two committees were formed within the Board of Directors: the Audit Committee and the Finance, Budgeting and Strategy Committee. The committees’ responsibilities include the preliminary consideration of the most important issues reviewed by the Board of Directors and the preparation of recommendations for appropriate action.

October

On October 15, a new Metalloinvest Board of Directors was elected. Ivan Streshinsky was elected Chairman of the Board. Andrey Varichev was appointed Chief Executive Officer of Management Company Metalloinvest.

November

The Company received an award for Best Debut Annual Report at the 16th annual Federal Annual Reports and Websites Competition.

December

The Company’s management was strengthened by new appointments. Andrey Ugarov was appointed First Deputy CEO, Chief Operating Officer, of Management Company Metalloinvest, and will concentrate his efforts on increasing operational efficiency. Marina Novikova was appointed Deputy CEO for Organisational Development and Human Resources Management, who will work to further develop the Company’s organisational structure and personnel policy.

Management Company Metalloinvest’s adviser on industrial policy, Yury Mishin, was elected Vice President of the International Iron Metallics Association (IIMA).

Social and Environmental Responsibility

February

Lebedinsky GOK and OEMK won a competition for the best occupational health and safety amongst mining and metallurgical companies in the Belgorod Region in 2012. The competition was held by the Miners’ and Metallurgical Workers’ Union of Russia and the Belgorod administration’s labour and employment department.

March

Metalloinvest, the Kursk Region administration and Zheleznogorsk town administration signed a Social Partnership Programme for 2013. The document provides for certain mutual obligations regarding priority investment projects to support the social development of the region and the town.

Metalloinvest received a diploma at the All-Russian contest “The Best Russian Companies. Dynamics, Efficiency, Responsibility — 2012”. The Company was recognised in the Successful Debut in Non-Financial Reporting category for its 2009-2010 Report on Corporate Social Responsibility.

April

Metalloinvest and the Government of the Belgorod Region signed a Social Partnership Programme for 2013. The document specifies certain mutual obligations related to priority investment projects to support the social development of the region and the towns of Stary Oskol and Gubkin where the Company is present.

June

A new exhaust gas purification unit was launched at electric arc furnaces 3 and 4 at OEMK. The launch of the new exhaust gas purification unit has led to a reduction in the release of dust into the atmosphere at the two furnaces by 50%. The level of dust at workplaces has fallen twofold on average.

August

OEMK brought into operation a modernised sewage-water treatment facility. The new technology significantly improves the quality of sewage-water treatment, cutting the volume of river-water intake by half and reducing sewage-water discharge into the Oskol River. The cost of the project was over USD 6.6 million.

October

OEMK and Lebedinsky GOK received letters of acknowledgement for their contribution to environmental protection from the Federal Supervisory Natural Resources Management Service and the Duma of the Belgorod Region. Chief environmental officers received recognition for measures implemented in 2013 aimed at reducing the negative impact of the plant’s operations on the environment.

Metalloinvest, the Government of the Orenburg region and the Novotroitsk town administration signed a Social Partnership Programme for 2013. The document contains certain mutual obligations related to priority investment projects in the social development of the region and the town.

November

Metalloinvest provided aid to flood victims in the Far East of Russia. The Company donated RUB 50 million (more than USD 1.5 million) to the Interregional Association of Economic Partnership of the Far East and Zabaykalye. The funds were used for reconstruction works to mitigate the consequences of flooding and as targeted financial support for the local residents.

December

Metalloinvest was awarded the Diploma for Achievements in Protecting the Health of Russia’s Working Population at the 12th All-Russia “Occuption and Health” congress in Moscow.

Subsequent Events — 2014*

February

Metalloinvest, the Kursk Region administration and Zheleznogorsk town administration signed a Social Partnership Programme for 2014. The document provides for certain mutual obligations regarding priority investment projects to support the social development of the region and the town.

Standard & Poor’s Ratings Services upgraded Metalloinvest’s long-term corporate credit rating from ‘BB-’ to ‘BB’ with a stable outlook.

March

A new executive body — the Management Board — was formed at Metalloinvest. Andrey Varichev, CEO of Management Company Metalloinvest, was appointed Chairman of the Management Board. The formation of a new executive board is aimed at further enhancing the Company’s corporate governance and reinforcing its focus on operational activity. The inclusion of Managing Directors from Metalloinvest’s divisions on the Management Board will enable the Company to determine more efficient ways for future development.

Ural Steel confirmed the compliance of its environmental protection system with the requirements of international standard ISO 14001:2004 and its occupational safety and health management system with the requirements of international standard OHSAS 18001.

Metalloinvest and the Government of the Belgorod Region signed a Social Partnership Programme for 2014. The document specifies certain mutual obligations related to priority investment projects to support the social development of the region and the towns of Stary Oskol and Gubkin where the Company is present.

Metalloinvest won the “Russian Business Leaders: Dynamism and Responsibility 2013” competition organised by the Russian Union of Industrialists and Entrepreneurs (RUIE). The Company came first in the Socially Responsible Business category, in which it was recognised for its contribution to regional development.

Metalloinvest announced a pre-export finance facility (PXF) with a syndicate of international banks including Deutsche Bank, ING, Socie´te´ Ge´ne´rale, BNP Paribas, Credit Agricole CIB, UniCredit Bank, BTMU and Credit Suisse. The new facility is valued at USD 1.15 billion and shall be repaid in 2016-2019. It was drawn down at interest rates considerably lower than the interest rate on the preceding syndicated PXF loan due in 2015-2016, which was be refinanced with the funds received. The margin over the one-month LIBOR rate on the new facility is within the range of 125-165 bps.

April

Yevgeny Maslov was appointed Managing Director of Ural Steel. Mr. Maslov will combine the responsibilities of Managing Director with those of Chief

Engineer, a position he has held since 2012. The new Company’s Board of Directors was elected. Sergey Soldatenkov and Dmitry Tarasov were elected to the Board of Directors as Non-Executive Director and Executive Director, respectively.

The Compensation and Benefits Committee was created. Sergey Soldatenkov was appointed its Chairman.

OEMK confirmed the compliance of its occupational safety and health management system with the requirements of international standard OHSAS 18001:2007.

Metalloinvest secured a one-year contract to supply iron ore concentrate to KOKS Group. Under the agreement, the total amount of iron ore concentrate to be supplied will be more than one million tonnes.

May

Fitch Ratings upgraded the Company’s credit rating from ‘BB-’ to ‘BB’ with a stable outlook.

As part of the programme to increase the efficiency of the mining and transport complex, heavy-duty Hitachi excavators with 23 cubic metre buckets came into operation at the open-pit mines of Lebedinsky GOK and Mikhailovsky GOK.

June

Metalloinvest and Kosaya Gora Iron Works signed a three-year pellet supply contract. The agreement states that the volume of shipped products will amount to 1.9 million tonnes. Prices will be set based on current market benchmarks. The price calculation formula takes into account price movements in the global market.

* Hereinafter H1 2014 figures are used in the report.

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