Wheeling-Pittsburgh Steel Corp. and Severstal North America, Inc. signed a non-binding letter of intent to create a joint venture involving Wheeling-Pittsburgh Steel's Coke Plant, located in Follansbee, W.Va. The venture would ultimately provide for each party to take 50% of the coke produced by the joint venture.

The letter of intent calls for entering into a definitive joint venture closing on or before March 31, 2005. At the closing of a definitive joint venture agreement, Wheeling-Pittsburgh Steel will contribute the assets of its Follansbee Coke Plant to the joint venture. Severstal will contribute most of the capital to rebuild the facility — $140 million over the next four years for coke plant capital improvements. Severstal would also make a $20 million payment directly to Wheeling-Pittsburgh Steel at the closing of the joint venture.

The proposed agreement, after all capital contributions are received from Severstal, would provide Severstal with a 50% ownership of the joint venture. At that time, each party would take 50% of the coke produced by the joint venture.

"This agreement is good for Wheeling-Pittsburgh Steel, the State of West Virginia and the domestic steel industry," said James G. Bradley, Chairman, President and CEO of Wheeling-Pittsburgh Steel. "It would ensure a significant investment in West Virginia and in domestic cokemaking."

Bradley added, "The coke market has been highly volatile. This transaction minimizes our risk while assuring an adequate coke supply for our remaining blast furnace and freeing up capital for potential future value-added downstream investments."

Severstal North America, Inc. is an integrated flat rolled sheet steel producer that primarily serves the automotive, converter and service center markets in North America. Its manufacturing facilities and corporate offices are located in Dearborn, Mich., with approximately 2200 employees. Severstal North America, Inc. is a wholly owned subsidiary of OAO Severstal, the second-largest steel producer in Russia. In January 2004, OAO Severstal acquired the assets of the former Rouge Industries, Inc., including its primary subsidiary Rouge Steel Co.

Wheeling-Pittsburgh Steel Corp. is a metal products company with approximately 3100 employees. It has facilities in Steubenville, Mingo Junction, Yorkville and Martins Ferry, Ohio; Beech Bottom and Follansbee, W.Va.; and Allenport, Pa.