Wheeling-Pittsburgh Steel Corp. and SNA Carbon, LLC announced the formation and funding of their new joint venture, Mountain State Carbon LLC. The new venture now owns Wheeling-Pittsburgh's coke plant in Follansbee, W.Va.

SNA Carbon has contributed an initial $50 million to Mountain State Carbon, and Wheeling-Pittsburgh has contributed all of its coke producing and related assets plus an initial $10 million. Over the next several months, SNA Carbon will contribute an additional $40 million for a 50% share in Mountain State Carbon. Under agreements with Mountain State Carbon, Wheeling-Pittsburgh Steel will continue to operate and manage the coke plant, and the coke plant workers will remain Wheeling-Pittsburgh employees.

"Mountain State Carbon was made possible because of our investment in electric arc furnace technology that reduces our coke requirements by approximately 50%," said James G. Bradley, Chairman and CEO of Wheeling-Pittsburgh Steel. "Mountain State Carbon will produce all of our remaining coke requirements, and will provide SNA Carbon with a substantial portion of its needs."

"The formation of Mountain State Carbon is not only an important step for Wheeling-Pittsburgh and for SNA Carbon, but it is very meaningful to the State of West Virginia," Bradley said. "SNA Carbon's cash contribution to Mountain State Carbon represents a significant investment in West Virginia and enhances the long-term viability of about 350 manufacturing jobs in the Northern Panhandle. Creating Mountain State Carbon will permit Wheeling-Pittsburgh to continue its focus on improving its reliability, quality and service to those customers who count on us."

Wheeling-Pittsburgh and SNA Carbon will purchase all the coke produced by Mountain State Carbon at cost. Additionally, SNA Carbon has paid $20 million to Wheeling-Pittsburgh pursuant to a 2005 coke supply agreement.

"The culmination of this joint venture company is a significant milestone in our quest to secure a reliable and competitive domestic supply of metallurgical coke for our steelmaking operations," said Ronald J. Nock, President and CEO of Severstal North America, Inc. "We look forward to this important partnership with Wheeling-Pittsburgh Steel Corp., its employees and all the stakeholders of Mountain State Carbon."

Wheeling-Pittsburgh Steel is a steel company engaged in the making, processing and fabrication of steel and steel products using both integrated and electric arc furnace technology. The company's products include hot rolled and cold rolled sheet and coated products such as galvanized, pre-painted and tin mill sheet. The company also produces a variety of steel products including roll formed corrugated roofing, roof deck, floor deck, bridgeform and other products used primarily by the construction, highway and agricultural markets.

SNA Carbon, LLC is a wholly owned subsidiary of Severstal North America, Inc. of Dearborn, Mich., an integrated flat rolled sheet steel producer that primarily serves the automotive, converter and service center markets in North America. Severstal North America employs approximately 2,000 employees in its manufacturing facilities and corporate offices located in Dearborn, Mich. Severstal North America is a wholly owned subsidiary of OAO Severstal, Russia's second largest steelmaker, and an affiliate of Severstal Group, a Russian-based conglomerate including metallurgy, mining, automobile manufacturing, machinery, transportation and other businesses.

The Severstal Group employs approximately 150,000 people and operates more than 30 plants in 14 regions across Russia and the United States. In April 2005, Severstal Group acquired a 62% interest in Lucchini SpA., an Italian based specialty steel manufacturer with 20 industrial plants and 9,000 employees located in Italy, France, Great Britain and Sweden.