PRESENTATION

1. Slide 1
Russian Coking Coal Developments
and Leading Mongolian Operations
– Competition or Co-Existence
Presented by
John P L Bacharach, Director, IMC Montan, Moscow
23/24 May 2012

2. Slide 2
The Projects

3. Slide 3
The Projects (2)

4. Slide 4
Apsatskoye
 Name of Project: Apsatskoye
 Developer: Arctic Developments/SUEK
 Location: Near Chara, Chita Region
 Coal Types: Coking and thermal
 Reserves: About 425mt

5. Slide 5
Apsatskoye (2)
 Mining Method: Surface and underground
 Planned Full Capacity: 6.8mtpa
 Approximate Capex: $1.0bln
 Rail Connection: Short
 Target Markets: China

6. Slide 6
Elegest
 Name of Project: Elegest
 Developer: Russian Copper Company
 Location: Near Kyzyl, Tyva Republic
 Coal Type: Coking
 Reserves: About 400mt

7. Slide 7
Elegest (2)
 Mining Method: Underground
 Planned Full Capacity: 18mtpa
 Approximate Capex: $1.8bln
 Rail Connection: 430km
 Target Markets: Russia 6-10mt, Export 8-
12mt

8. Slide 8
Elga
 Project Name: Elga
 Developer: Mechel Mining
 Location: 370km west of Nerungri, Sakha
Republic
 Coal Types: Coking and thermal
 Reserves: About 2.0bln t

9. Slide 9
Elga (2)
 Mining Method: Open Pit
 Planned Full Capacity: 27mtpa
 Approximate Capex: $3.0bln
 Rail Connection: 315km
 Target Markets: Asia Pacific

10. Slide 10
Mezhegeiskoye
 Name of Project: Mezhegeiskoye
 Developer: Evraz Group
 Location: Near Kyzyl, Tyva Republic
 Coal Type: Coking
 Reserves: About 210mt (Mezhegeiskoye)
and 580mt (Vostochny)

11. Slide 11
Mezhegeiskoye (2)
 Mining Method: Underground
 Planned Full Capacity: 7-12mt
 Approximate Capex: $1.5bln
 Rail Connection: As Elegest
 Target Markets: Asia Pacific

12. Slide 12
Ulug-Khem
 Name of Project: Ulug-Khem, Central Area
 Developer: Severstal
 Location: Near Kyzyl, Tyva Republic
 Coal Type: Coking
 Reserves: About 630mt – Central Area

13. Slide 13
Ulug-Khem (2)
 Mining Method: Open Pit
 Planned Full Capacity: 12.5mt
 Approximate Capex: $3.0bln
 Rail Connection: As Elegest
 Target Markets: Asia Pacific

14. Slide 14
Usinskoye 1
 Name of Project: Usinskoye 1
 Developer: Severstal
 Location: Vorkuta, Komi
 Coal Types: Coking
 Reserves: 620mt

15. Slide 15
Usinskoye 1 (2)
 Mining Method: Underground
 Planned Full Capacity: 4.0mt
 Approximate Capex: $1bln
 Rail Connection: 30km to existing
 Target Markets: Russian Steel Plants

16. Slide 16
Usinskoye 3
 Name of Project: Usinskoye 3
 Developer: NLMK
 Location: Vorkuta, Komi
 Coal Types: Coking
 Reserves: 227mt

17. Slide 17
Usinskoye 3 (2)
 Mining Method: Underground
 Planned Full Capacity: 4.5mt
 Approximate Capex: $1.5bln
 Rail Connection: 3km from existing
 Target Markets: Russian Steel Plants

18. Slide 18
Indicative Production Capacity in
2020 (mtpa)
Apsatskoya 6.8
Elegest 18.0
Elga 24.0
Mezhegeiskoye 9.0
Ulug-Khem 12.5
Usinskoye 1 4.0
Usinskoye 3 4.5
TOTAL 78.8

19. Slide 19
Summary
 These seven developments will provide:
Almost 80mtpa of new production capacity
Secure supply of coking coal for Russian steel
makers
Big increase in coking coal supplies (and
some in thermal)
Massive pressure on rail and port capacity

20. Slide 20
Competition or Co-Existence
 Much of Russian new production will be used in
Russian steel plants
 Any surplus will be exported through Far East
ports
 Majority of Mongolian production likely to go to
China
 Lack of infrastructure mitigates against
Mongolian coal going to Russia or Russian coal
to China
 Most likely outcome is co-existence!

21. Slide 21
Contact
John P L Bacharach
Director
IMC Montan
Chayanova 22, Block 4
Moscow 125047
Russia
Tel: +7 499 250 6717
Fax: +7 499 251 5962
E-mail: consulting@imcgroup.ru