Chelyabinsk Zinc Plant Reports 11.2% Production Increase for the 12 Months of 2007

January through December 2007, Chelyabinsk Zinc Plant (CZP) produced 165,007 tn of SHG zinc and zinc based alloys, an increase of 11.2% as compared to the same period of 2006 (148,384 tn). 49% of zinc sales (by tonnage) were made on the domestic market. The largest Russian steel producers: MMK, NLMK and Severstal remain to be CZP’s principal customers.

CZP’s subsidiary, Nova Zinc LLC, operator of Akzhal zinc and lead ore mine in Kazakhstan, processed 1,281.8 thousand tn of ore in January – December of 2007, 3.9% more than for the same period of 2006 (1,233.7 thousand tn). Average zinc content in the ore for the twelve months of 2007 was 2.54% with average lead content of 0.46%, compared to 2.85% and 0.68% respectively a year ago. Production of zinc in zinc concentrate for the twelve months of 2007 decreased 7.61% to 30,002 tn over the prior year result of the same period of 32,474 tn. Lead in lead concentrate production decreased by 31.2% to 4,785 tn (vs. 6,953 tn in January – December of 2006). Since the beginning of the year, all zinc concentrate produced by Akzhal mine have been supplied to Chelyabinsk Zinc Plant.

CZP’s subsidiary, The Brock Metal Company Limited (the leading UK supplier of zinc and aluminum die-casting alloys) sold 13,190 tn of products July through December 2007, 13.3% less than for the same period of 2006 (15,220 tn).

Commenting on the 2007 production results, Sergei Moiseyev, Chairman of the Board, CZP, noticed: ‘Production goals were successfully achieved in 2007 and we’ve made several steps to secure full independence in raw materials supplies by 2010. In particular, the Waelz kiln #5 was put into operation; the plant has also received a license for the development of Amur zinc field. Our major strategic objective still remains to reach the output of 200,000 tn of zinc per year by 2010.The company estimates the total production volume in 2008 to reach 170 thousand tn while the production of zinc in concentrate by Akzhal mine will reach 35,000 tn.’

CZP expects to announce its 2007 audited consolidated annual financial statements in June 2008.