The mild steel core is simply a cost-saving measure. The original 7.62x39mm cartridge (actually beginning life as a 7.62x41mm) had a lead cored projectile. As adopted in 1949, it had the mild steel cored “PS” type projectile. This design saves a lot of lead. Where iron ore and steel working facilities are abundant, this saves a lot of money in the long run. There is an added benefit of increased penetration through cover and concealment, but not “armor” of any kind. From my own personal tests, the steel cored projectile has well over two times the penetration through stacked wood boards compared to lead cored projectiles. Against mild steel, there is not much difference in penetration between the two types. Both types flatten against steel plate, but the steel cored projectile remains intact longer, allowing it to transfer more of it’s energy to the target. In my personal tests, both types penetrated 1/4" thick mild steel plate at 25 yards. But against a second plate, one inch behind the first, the lead core projectile basicly disintegrated and barely left a dent. The steel cored projectile remained relatively intact and left a large dent in the second plate. Recovered projectiles had “mushroomed” into the shape of the dent in the second plate. There is also a difference in the lethality between the two types. The flat based lead core type is generally considered more lethal than the longer, boat-tailed steel core projectile (Re: Fackler studies). There is interesting anectdotal evidence of this coming out of Iraq. Since both projectile types are in widespread use over there, some 7.62x39mm wounds are described as relatively simple and others causing more damage. This has been attributed to the two projectile types in use.