International company Middlesex

|OEMK export |3697 |6000 |8250 |8750 |

|Oskmet (DRI) |96 |1027 |1024 |11027 |

|Wolff Steel |242 |1200 |1200 |1200 |

|Total |4035 |8227 |10,477 |10977 |

The OEMK-MiddleSex relationship extends beyond the trading agreement.

MiddleSex monitors the day to day running of the mill, the company’s management spends considerable time at the mill while two OEMK representatives monitor steel trading in London on permanent basis. In addition, OEMK has a 20 % interest in MiddleSex’s financial services arm,

Interfin. Overall, according to what I have observed, I believe that this relationship is very strong.

Due to increasing environmental concerns and the subsequent growth of the electric arc furnace (EAF) steel-making facilities, direct iron reduction technology is becoming more attractive. Originally, all DRI exports from OEMK were handled by DRI (IOM) Ltd. In August 1996 MiddleSex bought 100% of DRI Ltd. For a maximum consideration of 2.8m and inherited a ten year exclusive world wide distribution.

|DRI EXPORTS BY REGION (‘000 metric tonnes) |

|Region |1993 |1994 |1995 |1996 |1997 |1998 |

| | | | | | |(Est) |

|European |218.0 |296.7 |221.1 |161.4 |225.0 |215.0 |

|Union | | | | | | |

|CIS |- |52.1 |96.3 |68.8 |72.5 |95.0 |

|USA |5.0 |- |- |37.1 |42.5 |57.5 |

|Australia|33.0 |26.0 |0.4 |44.3 |28.5 |35.0 |

|Total |331.0 |402.1 |429.2 |367.1 |453.5 |477.5 |

Since it gained the control over DRI exports, MiddleSex has managed to significantly expand the company’s customer base. Currently, OEMK’s DRI pellets feed steel mills in USA, Spain, Germany, Italy and Mexico.

According to my observation I believe that a vertical integration of

MiddleSex’s steel activities is possible and would be highly beneficial for both partners. Assuming that MiddleSex takes an equity interest in

Lebedinsky GOK, the raw material supplier (such as iron ore), and increases its equity interest in OEMK, MiddleSex would have an economic exposure to entire steel operation, from the raw material (Lebedisky), through the steel mill(OEMK) to trading (MiddleSex/WolffSteel)

Non-ferrous MetalsAluminium was one of the original businesses which Masoud Alikhani injected into MiddleSex when he joined in 1993. The aluminium business was built upon Mr. Alikhani’s trading relationship with Tadaz, the third largest aluminum smelter in the world, located in Tajikistan. Historically, the relationship with Tadaz was that MiddleSex would supply the aluminium; it would pre-finance the processing and in return it would receive the aluminium which it would then sell in the international markets. The relationship worked profitably. However, throughout 1996, the political situation in Tajikistan deteriorated, trading cycles became longer and no deliveries were made in the last six months of 1996, leaving MiddleSex owned some US7.9m(Ј 4.6m). MiddleSex believes it will recover this debt: it has already received US$2.4m(Ј 1.5m) in late June 1997. Negotiations are well advanced to collect the balance.