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November 2006

Schnitzer settles $15.2 million for alleged bribery charges

Schnitzer Steel Industries, Inc., headquartered in Portland Oregon, has finalized settlements with the United States Department of Justice and the United States Securities and Exchange Commission resolving an investigation into their practice of payments to purchasing managers of the Company’s customers in Asia for export sales of recycled ferrous metals.

Schnitzer reached a $7.7 million settlement and it will pay an additional $7.5 million fine. The aggregate payments of $15.2 million (including interest charges) under the settlement are consistent with the $15 million reserve that Schnitzer Steel announced in its quarterly financial reports for the first and third quarters of fiscal 2006.

The Company’s Korean subsidiary pled guilty to Foreign Corrupt Practices Act anti-bribery and books and records provisions, conspiracy and wire fraud charges and will pay a fine of $7.5 million.

The Company agreed to an order, issued by the Securities and Exchange Commission, to cease and desist from the past practices that were the subject of the investigation and to pay $7.7 million of profits and prejudgment interest.

Schnitzer Steel and the government agreed to a deferred prosecution agreement, under which the government will not prosecute the Company if the Company meets the conditions of the agreement for three years.

Under the terms of the settlement, Schnitzer Steel has employed a compliance officer and designed and implemented a comprehensive compliance program, which will be overseen by the Audit Committee of the Company’s Board, and will engage a compliance consultant to advise the compliance officer and the Board on the compliance program.

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