25 November ‘11

Magnitogorsk Iron and Steel Works to Acquire 100% of Flinders Mines Limited for A$ 0.30 per Share by Cash Offer

MOSCOW, November 25, 2011 - Magnitogorsk Iron and Steel Works OJSC (LSE: MMK) (“MMK”) today announces the execution of a Scheme Implementation Agreement to effect the acquisition of Flinders Mines Limited (ASX: FMS) (“Flinders”) by MMK. MMK has offered to acquire 100% of the issued shares in Flinders at A$0.30 cash per share (“Offer”), implying a fully diluted value for Flinders of approximately A$554 million. Flinders’ Board of Directors unanimously recommends that all Flinders shareholders vote in favour of the acquisition.

Flinders’ flagship asset, the PIOP (Pilbara Iron Ore Project), is located in the West Pilbara region of Western Australia. The PIOP has a large 917.3Mt JORC-compliant resource of high quality direct shipping and easily beneficiable feed ore with average grade Fe 55.2% and significant potential for further resource upgrades. Production at PIOP is scheduled to commence in 2015 with estimated annual volumes of 15 mln ton of saleable product.

With this transaction, MMK will gain access to a high-quality iron ore development project with a substantial resource base and robust economics with low operating and capital costs.

MMK Board of Directors Chairman Victor Rashnikov said, “I am delighted to announce our agreement to acquire 100% of Flinders Mines. With the support of MMK and under the continued leadership of their professional management team, I am confident that Flinders will develop into a leading iron ore producer in Australia.” Mr. Rashnikov continued, “This transaction represents another important step forward for MMK to become highly efficient vertically integrated international metals and mining company.”

The transaction is subject to regulatory approvals in Australia and is expected to close in March 2012.

About Flinders Mines Limited 
Flinders Mines Limited (“Flinders”) is a S&P/ASX 300 pure-play iron ore company. Its flagship asset, the Pilbara Iron Ore Project is located in the West Pilbara region of Western Australia and is within close proximity of existing and proposed infrastructure. Flinders is targeting production from the Pilbara Iron Ore Project by early 2015. Flinders’ secondary project, Canegrass, is located in the Mid West region of Western Australia. For further information please visit: flindersmines.com.au.  

About MMK 
MMK is among the world's largest steel producers and is one of the leaders of Russia's steel industry. The company's operations in Russia include a large steel producing complex encompassing the entire production chain, from preparation of iron ore to downstream processing of rolled steel. MMK turns out a broad range of steel products with a predominant share of higher value added products. In 2010 the company produced 11.4 mln tonnes of crude steel and 10.4 mln tonnes of commercial steel products.  
MMK Group revenue in 2010 stood at USD 7.719 bn, EBITDA at USD 1.606 bn, profit for the period - USD 232 mln. For further information please visit: eng.mmk.ru.

MMK Communications Department
Kirill Golubkov  
tel.: +7 (916) 675 3081

Elena Evstigneeva
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Alexander Proskurov
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