Arbitration Process Update

Open Joint Stock CompanyMagnitogorsk Iron and Steel Works(MMK)

Press Release

May 25, 2012, Magnitogorsk

OJSC MMK announces that on May 24, 2012, the Arbitration Court of Chelyabinsk Region held a hearing on the merits with respect to the action brought in by MMK's minority shareholder Elena Egorova who has challenged the legitimacy of the MMK Board of Directors' resolutions with respect to the acquisition of 100 percent stake in Flinders Mines Limited.

Prior to the hearing on the merits, the court has satisfied the motion by the plaintiff who was insisting that the court hearings should be held in private. During the hearing, the plaintiff has submitted the documents, as she had been earlier obliged by the court, which are subject to additional examination. As a result, the Arbitration Court has ruled to postpone the hearing on the merits until July 2, 2012.

OJSC MMK has been taking all lawful measures to eliminate the circumstances preventing the deal from execution. MMK considers the plaintiff's action as ungrounded and further states that the company was acting in full conformity with applicable laws at all the stages of implementing the transaction to purchase 100 percent shares of Flinders Mines Limited.

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