Evraz Wins European Commission First Phase Clearance to Acquire Sole Control of Highveld

February 20, 2007

Cleary Gottlieb successfully represented Russia’s largest steel producer Evraz Group S.A. in the European Commission’s investigation of Evraz’s acquisition of a majority stake and sole control of South African steel and vanadium company Highveld Steel and Vanadium Corporation Limited from Anglo South Africa Capital (Proprietary) Limited and from Credit Suisse International. On February 20, the Commission cleared the transaction in first phase, subject to conditions.

Evraz and Highveld are active in the mining and production of steel and vanadium products, including vanadium feedstock, vanadium oxides (intermediate products) and finished vanadium products (principally vanadium for steel applications, but also specialty vanadium alloys for the titanium industry and certain vanadium chemicals).

The Commission undertook an extensive market investigation due, in particular, to third-party complaints. As a result of this investigation, the Commission raised concerns that the proposed transaction would significantly impede effective competition worldwide for downstream vanadium products. To resolve these concerns, Evraz committed to divest Highveld’s vanadium extraction and production facilities and to provide access to Highveld’s Mapochs mine. In addition, Evraz committed to divest Highveld’s 50% shareholding in a joint venture with activities in the production and marketing of ferrovanadium. Evraz also agreed to maintain its existing feedstock supply arrangements with certain customers.

Evraz intends to purchase both Anglo American’s 29.2% shareholding and Credit Suisse’s 24.9% shareholding in Highveld through the exercise of separate options on these shareholdings once the requisite regulatory approvals have been granted. The transaction is, in particular, still subject to approval from the South African competition authority. Upon completion of the transaction, Evraz will hold approximately 79% of all outstanding shares in Highveld and, as a result, will exercise sole control over Highveld. Under South African law, Evraz will be required to make a mandatory general offer after Evraz acquires the option shares.