Leading PCI coal producer with significant reserves and resources

Transcription

1 1 Leading PCI coal producer with significant reserves and resources

2 Overview T he deposit was founded in 2009 for mining and export of high quality PCI coal that goes into coking mix It owns 224 hectares of land (covers mining and waste sites) and a license for coal mining in Prokopievsky District of Kemerovo Region valid until 30 October 2027 T he reserves of high quality Low VM PCI coal amount to 28 mln. tons, while the resources of 212 mln. tons show further growth potential T he company has sufficient fleet of new vehicles and equipment in place for annual production of 1. 5 mln. tons, while the extension is underway to reach 3 mln. tons T he producer owns railway loading station that provides significant competitive advantage in terms of logistics 2

3 Favorable location in the heart of the major coal region 3 Coal deposit is located in K emerovo R egion, which is the heart of R ussian coal mining industry, with abundant materials, technology and labor supply The location allows the company to export coal both to Asia and to Europe depending on the market conditions in these regions The nearest r ailway stations T rudarmeiskaya (1 km) and T yrgan (3 km) are situated in close proximity to the deposit Russian F eder ation Kemerovo region

4 State approved reserves with substantial growth potential 4 The table below shows the reserves approved by the State Commission of Reserves as well as the resources Moisture, % Ash, % Volatile matter, % Sulphur, % Net calorific value, kcal/kg The reserves of high quality T -grade coal amount to 28 mln. tons The resources of 212 mln. tons show further potential. The drilling program of $2 mln. is planned to convert these resources into reserves Categories Reserves and resources, 000 tons State approved reserves State approved resources State approved reserves and resources

5 Own mining equipment allows to work independently 5 The Company has its own mining equipment and infrastructure, allowing it to work independently from other companies: There are two coal storage areas with two rail sidings 0.9 km and 2.7 km with capacities of 150,000 tons and 80,000 tons Production buildings with floor space of m 2 Site roads of over 27.0 km Four waste stockpile sites with total capacity of 200 million m 3 Power lines over 10 km of 2.5 MW Pumping infrastructure providing drainage for the deposit Crushing and sorting complexes Two fuel storages Loading site of 1 hectare, weighing equipment with scales for auto and rail transport 224 hectares of land in ownership (mining operations and waste sites) Maintenance shed 500 m 2 with equipment for repairs

6 Considerable fleet of vehicles in ownership 6 The Company has its own fleet of mining vehicles: Mining dump trucks BELAZ units Grader DZ-98-1 unit Loader M unit Loader Caterpillar unit Loader Shantui SL50W 1 unit Loader Komatsu WA unit Bulldozer T-25-1 unit Bulldozer T unit Bulldozer Komatsu D65E-12-2 units Roller-bit drilling rig SBSh unit Excavator Liebherr R unit Excavator Komatsu PC unit Excavator Hitachi ZX330LC-3 1 unit Excavator EK unit Excavator EKG-4Y - 2 units Excavator EKG-5A - 2 units Excavator Caterpillar 330 CL 1 unit Excavator Caterpillar 365 BLME 1 unit

7 Vehicles in leasing allow to further increase production 7 The Company also has mining vehicles in leasing: Mining dump trucks BELAZ 7555B 18 units Roller-bit drilling rig Atlas Copco DML+ - 1 unit Excavator Volvo EC 700 B - 2 units Roller-bit drilling rig Atlas Copco - 1 unit Grader DZ-98B - 1 unit Bulldozer CAT В 9-R - 1 unit Loader CAT 980H 3 unit Tip-truck CAT unit

8 Open pit deposit is favorable for further expansion 8 The deposit is an open pit First step The first step of mining consists of site preparation, drilling and blasting operations Second step The second step of mining involves excavation of the overburden and its storage in the stockpiles that are owned by the company The third step of mining includes excavation of coal and its storage in storage areas that are owned by the company The fourth step consists of coal sorting and wagon loading at the railway station that is owned by the company Third step Fourth step

9 PCI coal market and production growth 9 Our low volatile PCI coal provides further carbon (over that derived solely from the coke) for iron-making. As a result of the extra carbon introduced by PCI coal, steel makers can reduce the amount of coke necessary for steel making This low volatile PCI (L V PCI) coal is increasingly sought by steel mills in preference to higher volatile coal because it provides superior performance in the blast furnace due to its higher carbon and energy content The replacement r atio of L V PCI coal to coke varies according to the requirements of each blast furnace. T ypically, 1.0 ton of L V PCI coal can replace 1.3 tons of more expensive coking coal Consequently, L V PCI coal has proven to be effective in lowering the cost of steel making and has established a niche in the market for metallurgical coal The producer implements two-stage development plan of the deposit First stage (currently underway): R eaching of production level of 125,000 tons of coal per month by the first half of 2014 Second stage (gr adually starts in 2014): Purchase/leasing of new equipment (mining dump trucks, graders, bulldozers, loaders) R eaching of production level of 250,000 tons of coal per month by the end of 2014