Chief executive of North America division discusses proposed $480M expansion

The community’s love of the steel industry, its workforce and a package of state and local economic
development incentives leaves EVRAZ confident of its proposal to convert its Pueblo steel mill into
the most modern rail mill in North America, a top company executive said Monday in Pueblo.

Conrad Winkler, chief executive of Chicago-based EVRAZ North America, traveled to Pueblo on
Monday to personally announce the selection of the Pueblo mill for the company’s proposed $480
million modernization project that will include the construction of a new unit to produce longer rails.

Winkler also thanked local governments, the state of Colorado, Xcel Energy, the Pueblo Economic
Development Corp. and others for the economic development package offered to the project. The
package includes $15 million from Pueblo’s half-cent sales tax fund for economic development,
significant tax breaks and a promise of fixed low-cost power.

Beyond helping to give Pueblo an advantage over bidders in other parts of the country, the package
will be critical to making the massive investment economically viable for the company, Winkler said.

A final decision by EVRAZ is expected next year after a final round of design, engineering and
financial analysis.

“Today marks a major milestone in our journey to build a 21st century steel mill here in Pueblo. This commitment from the city is critical to moving to the next phase of study on the project,” Winkler said.

“We are grateful to all of you for your deep commitment to the future of this community and for
walking alongside the EVRAZ North America team in this journey. Given the difficult and challenging
global steel markets, we truly could not do this without your support.

“…Let me extend our most sincere thanks along with our commitment to work as hard as we can to
turn the vision of installing the most advanced rail rolling mill in North America into reality.”

Winkler’s comments came before more than 150 steelworkers, community members and business
and government representatives gathered at the Pueblo Convention Center on Monday afternoon
for an event billed as a “Celebration of Steel.”

Details of the project were first disclosed publicly Friday at EVRAZ’s annual Investor Day
conference in London but that announcement didn’t dampen the celebratory atmosphere of
Monday’s event.

One by one, Pueblo leaders took turns on the microphone, thanking EVRAZ and its workers for for
their past and future commitment to the community. The steel mill goes back to 1872 in Pueblo.

“It is our heritage. It is in our body, in our blood, in our soul,” Pueblo County Commissioner Terry Hart said. The proposed project “is absolutely spectacular … and I’m incredibly proud it’s in my backyard.”

Jerry Pacheco, chief executive of the Pueblo Urban Renewal Authority, was among several
speakers who noted direct family ties to the mill.

In his case, his grandfather worked for decades at the mill’s old coke plant that converted coal to
fuel, Pacheco said. Today, it is in that general area where EVRAZ intends to build the new long-rail mill, he noted.

“This is a special project for our community,” he said.

Pueblo City Councilman Ray Aguilar, whose district includes the Bessemer neighborhood near the
mill, talked about the importance of EVRAZ and its predecessors such as CF&I in Pueblo’s history.
The proposed project would inject new life into the aged neighborhood, he said. “This is a big day
for Pueblo,” he said.

In addition to the proposed $480 million in capital spending, EVRAZ would look to maintain the mill’s workforce at a minimum of 1,000 employees, which is around or slightly larger than its current size, and pay an average pre-benefits wage of $60,000 to $65,000 a year.

Winkler, during his remarks, acknowledged the alternative is bleak for the Pueblo mill. The plant also produces seamless pipe, rod and bar but rails are its biggest product line and “without the rail business, there is no steel mill in Pueblo,” he told those gathered at Monday’s event.

EVRAZ’s ability to produce longer rails that are more cost-efficient and easier to maintain are critical to the company’s goal of preserving and growing its North American-leading market position in rails, Winkler said. “We must continue to innovate and modernize our assets,” he said.

Pueblo City Council on Monday night approved the project’s complex local incentives package and
city annexation agreements drafted in cooperation with Pueblo County, the Pueblo Urban Renewal
Authority and other taxing bodies in the area.

A summary released Monday by PEDCO:

• $15 million from the city’s half-cent sales tax fund for economic development.
• An estimated $75 million or more in future property, sales and use tax savings for the mill via the creation of an Urban Renewal Authority project area and Tax Increment Financing district.
• $800,000 for pre-employment training at Pueblo Community College.

Other incentives are pledged by the state. Last year, the state Legislature, at the request of Pueblo’s legislative delegation, voted to adjust the rules governing state tax credits in large part to benefit the then-unnamed EVRAZ project.