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

Slide 2

The Projects

Slide 3

The Projects (2)

Slide 4

Apsatskoye

Name of Project: Apsatskoye

Developer: Arctic Developments/SUEK

Location: Near Chara, Chita Region

Coal Types: Coking and thermal

Reserves: About 425mt

Slide 5

Apsatskoye (2)

Mining Method: Surface and underground

Planned Full Capacity: 6.8mtpa

Approximate Capex: $1.0bln

Rail Connection: Short

Target Markets: China

Slide 6

Elegest

Name of Project: Elegest

Developer: Russian Copper Company

Location: Near Kyzyl, Tyva Republic

Coal Type: Coking

Reserves: About 400mt

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

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

Slide 9

Elga (2)

Mining Method: Open Pit

Planned Full Capacity: 27mtpa

Approximate Capex: $3.0bln

Rail Connection: 315km

Target Markets: Asia Pacific

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)

Slide 11

Mezhegeiskoye (2)

Mining Method: Underground

Planned Full Capacity: 7-12mt

Approximate Capex: $1.5bln

Rail Connection: As Elegest

Target Markets: Asia Pacific

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

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

Slide 14

Usinskoye 1

Name of Project: Usinskoye 1

Developer: Severstal

Location: Vorkuta, Komi

Coal Types: Coking

Reserves: 620mt

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

Slide 16

Usinskoye 3

Name of Project: Usinskoye 3

Developer: NLMK

Location: Vorkuta, Komi

Coal Types: Coking

Reserves: 227mt

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

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

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

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!

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