SCM GROUP PUBLIC REPORT 2011

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Sales geography, 2011 Region Steel products, thousand tonnes Coking coal products, thousand tonnes 32 Iron ore products, thousand tonnes Total, thousand tonnes Ukraine 2,066 557 1,502 4,125 South-East Asia 1,369 11 832 2,212 Europe 3,558 43 471 4,072 CIS 1,900 30 5 1,935 Middle East and North Africa 1,196 17 - 1,213 North America 66 360 - 426 Other countries 163 43 - 206 14% 9% 29% Investments 3% 1% 29% 16% The total volume of Metinvest Group’s investment in 2011 amounted to $1.17bn (excluding M&A). Ukraine South-East Asia Europe CIS Middle East and North Africa North America Other Metallurgical division The total volume of investment in maintaining production capacity and capital repairs at the divison’s enterprises amounted to approximately $174m in 2011. The performed repairs program involved oxygen converters, blast furnaces, and rolling mills.
Ilyich Steel plant began the implementation of the two large projects: construction of the turboblower and installation of the coal pulverizing unit in the blast furnace hearths. The turbobower will be put into operation in 2012, thus, allowing to increase the productivity of the blast furnace #3 by 7%, as well as to decrease the weighted use of coke by 7kg per tonne of cast iron. The total volume of project investment in 2011 amounted to $8m. The coal pulverizing unit will also be put into operation in 2012, thus, allowing to completely forgo the use of natural gas in the plant’s blast furnaces, as well as to decrease the weighted use of coke by 29kg per tonne of cast iron. The total volume of project investment is $177m, $21m of which was used in 2011. The stated technology will be installed at all the blast furnaces at the plant. Azovstal Steel Plant implemented the active stage of the controlled freezing unit construction at the heavy plate production facilities. Upon completion of the construction works, the plant will be able to produce rolled sheets from X80 and X90 grade steel. SMS Siemag AG was selected as general supplier of the equipment. The total project investment volume amounted to approximately $63m. Azovstal Steel Plant also invested $2.23m in the environmental projects in 2011. Yenakiyevo Steel Plant put into operation a modern blast furnace complex #3 instead of the disassembled obsolete one. The installed annual capacity of the new equipment is 1.2m tonnes of cast iron. During the period of operation, the new blast furnace allowed to decrease the weighted use of coke in cast iron production by 112.2kg per tonne (from 572.2kg to 460kg per tonne) and the weighted use of iron – by 15.8kg per tonne (from 1,010kg to 994.3kg per tonne). The total project investment volume exceeded $226m, $60m of which was used in 2011. Mining division InGOK commissioned the second complex for magnetic floatation beneficiation of iron ore concentrate with annual installed capacity of 3.3m tonnes of concentrate. The total project investment volume amounted to approximately $43m. 33 Focus points of the year SCM GROUP PUBLIC REPORT CREATING SUSTAINABLE VALUE In 2001, steel production volume increased by 64.4% yearon-year, amounting to 14.375m tonnes, coking coal production increased by 12.3%, amounting to 11.34m tonnes, while iron ore concentrate production remained unchanged, amounting to 35.74m tonnes. The increase in steel production was caused by the integration of Mariupol Ilyich Plant into Metinvest in November 2010, as well as by commissioning the reconstructed blast furnace #3 at Yenakiyevo Steel Plant at the end of the year. Simultaneously, the production volumes of Azovstal Steel Plant decreased by 96,000 tonnes, year-on-year. The volume of coking coal production at the US mines increased by 1.4m tonnes, while the Ukrainian mines of Metinvest demonstrated a 153,000 tonnes decrease in coking coal production. In spite of the 29.7% demand decrease for iron ore concentrate by the external consumers, its production remained stable and high. The reason for such production stability was the increased internal consumption – by Metinvest Group's enterprises, after the integration of Ilyich Plant into Metinvest, which was completed in June 2011. Within the framework of Metinvest Group’s metallurgical enterprises’ modernization and reconstruction program, Azovstal Steel Plant put its open-hearth blast furnaces out of operation. The plant completely switched its production facilities to oxygen converters. As a result, the quality of the end product will increase significantly, while the environmental footprint of the plant will decrease. In June, Yenakiyevo Steel Plant signed a long-term contract with Air Liquide (France) for the supply of industrial gases. Under the signed contract, Air Liquide will invest $139m in the construction of the air separation unit with the installed daily production capacity of 1,700 tonnes of oxygen, nitrogen, and argon. The project will be funded by the European Bank for Reconstruction and Development. Additionally, Yenakiyevo Steel Plant implemented a large-scale $25m repairs program, aimed at increasing the environmental safety, the economic effectiveness, and operational reliability of its equipment. In July, United Coal Company commissioned Affinity Mine, a new mine with the installed annual production capacity of 1.9m tonnes of high quality coking coal. SCM Group's business
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Page 3 and 4: 2011 Financial Results Assets $ m S
Page 5 and 6: 12 January DTEK signed a 49 year le
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Page 9: September DTEK signed a $150m, 3-ye
Page 12 and 13: 2000-2002 GROWING THE PORTFOLIO SCM
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Page 16 and 17: ILYA ARKHIPOV BUSINESS DEVELOPMENT
Page 18 and 19: ANDREY TELENKOV RETAIL BUSINESS DEV
Page 20 and 21: MARTA MOONEN HUMAN RESOURCES DIRECT
Page 22 and 23: SCM Group corporate transformation
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Page 45 and 46: Portinvest Holding was created in 2
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Page 51 and 52: Investments The total volume of inv
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Page 71 and 72: SCM, Metinvest, and DTEK presented
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SCM GROUP PUBLIC REPORT 2011

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