magazine

No. 1 2011

interview 4–8 Petr Otava, Chief Commercial Officer

theme 9–11 Safety levels improve at NWR

corporate responsibility 20 OKD Foundation to distribute CZK 60 million this year Editorial

Dear readers, 2010 saw a strong economic revival in We are making significant progress with our with a consequent increase Debiensko project in Poland. The exploratory in demand for coking coal and coke. It was works have been completed and we plan to a good year for NWR, and for most of our break ground before the end of the year. The customers and partners, and the economic mine should be fully operational within five downturn now appears to be behind us. Our years. revenues grew by 40%, EBITDA increased by one and a half times and operating cash flow Importantly, we will reincorporate NWR was 80% higher than in 2009. We were able in the UK this year, making us eligible for to pay a dividend of EUR 0.43 per share for inclusion in the FTSE indices. While this will the year as a whole, marking a return to our mean absolutely no disruption to our daily long-term dividend policy of distributing business, the positive impact on our equity 50% of our net profit. story should be significant.

There has been a pick-up in the automotive You can find more information about our industry and related sectors and 2011 looks plans and developments within NWR in the promising for coal and coke sales. Both following pages. And I am delighted that from globally and in Central Europe, demand for this issue, Open Mine magazine is available in coking coal has undoubtedly been influenced three languages – English, Czech and Polish. by the dramatic events in Australia. You can read about the factors influencing the Enjoy your reading. global coal and coke business, as well as the practical aspects of negotiating coal prices, Marek Jelínek in an interview with Petr Otava, who is Chief Financial Officer responsible for our coal and coke sales. New World Resources N.V.

Open Mine No. 1 I 2011 Published by: New World Resources N. V. Jachthavenweg 109h 1081 KM Amsterdam, the Netherlands Tel.: +31 20 570 2200 Fax: +31 20 570 2222 E-mail: [email protected] Web: www.newworldresources.eu

Editor-in-Chief: Tomáš Píša Editor: Marek Síbrt Authors: Vladimír Bystrov [email protected], Stephen Hough [email protected], Marek Síbrt marek.sibrt@.cz, Vladislav Sobol [email protected], Investor Relations NWR [email protected] Production and distribution: BISON & ROSE Design and typeset: BISON & ROSE Registration: MK ČR E 18829 Submission deadline: 10. 3. 2011

All rights reserved. The reproduction and use of all images contained within this publication without the written approval of NWR is forbidden. The logos of companies, products and services introduced in this publication are the business trademarks of the respective firms. Questions, remarks and article ideas can be sent to: [email protected]. An electronic version of the magazine including active links is accessible on the Company website at: http://www.newworldresources.eu/openmine 2–3 “Demand for coking coal along with prices strongly rebounded in 2010.”

4–8 9–11 “A quality “The number of service increases reportable injuries the certainty that at NWR mines we will hold on to decreased by half a customer.” during the last five years.”

13 14–17 “The decision “There is a long about how the journey between areas would look the initial intention after reclamation is to mine for coal taken by the local and the arrival of councils.” the first tonne at the surface.”

Content

2–3 economy 14–17 technology 2010 Highlights Mining for coal

4–8 interview 18–19 economy Coal trading is a special Coal and coke on world markets specialisation 20 responsibility 9–11 safety OKD Foundation to distribute Safety levels improve CZK 60 million this year at NWR mines 21 responsibility 12 economy Miners donate CZK 350,000 Continuous Improvement to St. Barbora, the highest sum ever 13 reclamations Returning the landscape to nature economy interview technology

2010 Highlights

On 24 February 2011, NWR announced a strong set of results for the financial year 2010 on the back of improved operational efficiencies as well as improved market conditions. Demand and prices improved throughout the year, picking up significantly at the end of last year.

A major achievement of the year was to deliver our production targets while at the same time keeping costs under control. Notably, POP 2010 – the huge investment to renew NWR’s mining equipment – delivered its first full year of improved efficiencies. We also Demand for coking coal along with prices strongly rebounded in 2010 completed COP 2010, our capital investment programme Globally, coking coal is in capital investment programme focussed on improving our short supply as China and improving our cost and safety coking operations. In line other emerging economies position. with our stated strategy at continue to drive world listing in 2008, we continued demand. Our move to bring We have also made good to streamline our business the pricing of most of our progress during 2010 in with the disposal in 2010 of coking coal in line with the developing our investment our energy assets, the last of Japanese Fiscal Year has projects in Poland, particularly our non-core operations. given us greater exposure Debiensko, where a world-class to the positive changes project team and group of Going forward we remain in global prices. Currently advisors are now in place committed to stringent cost there is a notable trend and undertaking a detailed control, which should help towards quarterly pricing feasibility study. to mitigate against the cost internationally and it is likely implications of mining deeper that the majority of our We continue to see the as well as the inflationary customers will look to price logic and benefits of being pressures on our inputs, such their coking coal contracts a regional consolidator. This as steel and energy. with us on this basis going would increase our scale forward. and resources and deliver Mike Salamon, Executive many synergies. As the first Chairman of NWR, We delivered on our total privatised, restructured and commented: “After a tough coal production targets and modernised coal business 2009, demand for coal and made significant progress in the region and the first coke in our markets rebounded on improving efficiency and to access multiple capital strongly in 2010 and we maximising returns from markets, we are in a strong successfully increased our our existing assets. In 2010 position to bring these volumes in response to this we continued to reap the credentials, combining both demand. benefits of our POP 2010 operational and financial

Open Mine 1 I 2011 2 safety reclamations responsibility

Efficiency gains & Polish development Subject to internal approval investment programmes projects: Debiensko and final licenses, NWR expects to break ground in The Productivity Optimisation NWR continues to execute Debiensko during the course Programme (“POP 2010”), a detailed development of 2011. which was completed at schedule for its Debiensko the end of 2009, continues project in Poland. The Detailed Dividend to deliver on its objectives. Feasibility Study (“DFS”) that The new equipment shows will map out the project Consistent with NWR’s improved performance scope, execution plan, budget dividend policy, the NWR has compared to existing and schedule as well as declared a final dividend of equipment and OKD is able a significant proportion of the EUR 0.22 per share, which to maintain coal production engineering for the project will be paid to shareholders output with 17 operating commenced in September in the form of an interim longwalls as opposed to 20 in 2010, and completion of dividend on 15 April 2011. 2009 and 32 in 2008. The the first stage is expected in Together with the dividend new equipment delivered an March 2011. This comprises of EUR 0.21 per share paid average daily production per the surface infrastructure in October 2010, this takes longwall of approximately and processing plant, as the full year dividend to 2,800t, an improvement of well as the access and coal EUR 0.43 per share for the 72% in comparison to the conveying declines. The full year 2010. previous technology, with engineering contracts for some longwalls delivering daily average production as high as 6,000t. 2010 Highlights Combining the performance of the new and existing equipment, overall longwall productivity in OKD rose by approximately Coal and coke production of 11.4 Mt and expertise, to bear on any 15% in 2010 to 1,743t/LW a day opportunities identified. compared to 2009. 1Mt, respectively Total external sales of 10.7 Mt of coal and Whilst the broader European NWR’s Coking Optimisation economic outlook remains Programme 2010 (“COP 2010”), 1.1 Mt of coke uncertain, we expect an investment programme Revenues of EUR 1,590 million demand for coking coal in designed to improve the EBITDA of EUR million the CEE region to remain efficiency and productivity of 464 robust, driven by a continuing the Company’s coke operations Earnings per share of EUR 0.86 recovery in the automotive and was successfully concluded Full year dividend of EUR 0.43 per share construction sectors. Recovery on target by the end of 2010 in Central Europe’s industrial and the newly constructed Safety metric improved by 24% sectors will also underpin coke battery No.10 at OKK’s demand for thermal coal, where Svoboda plant is now running we have already seen prices rise. at full capacity. Its maximum capacity, together with that these elements of the DFS Outlook for 2011 Last but not least, our plan of the renovated battery No. have, in large measure, already to reincorporate the business 8 and the other two operating been awarded to both Polish Expected production of in the United Kingdom and batteries in Svoboda, will and international firms. The 11Mt of coal and 800kt of secure FTSE UK index inclusion be 850kt in total from 2011 Company continues to make coke. External sales to reach will also extend our access to onwards. Following the progress on the land and approximately 10.3Mt of coal international capital markets. conclusion of COP 2010, NWR infrastructure elements of and 720kt of coke. Thermal coal expects lower unit conversion the project, with acquisitions average price agreed at EUR There is much work still to do, costs, with an optimised of land planned for the near 71 per tonne. Most coking coal but we are well positioned to personnel structure, as well as future. NWR expects to invest volumes expected to be priced deliver on our potential and increased flexibility to produce approximately EUR 50 million and sold on a quarterly basis. we begin 2011 as a stronger, different coke qualities as of CAPEX in its Debiensko more resilient business.” appropriate. project in 2011.

Open Mine 1 I 2011 3 economy interview technology

Coal trading is a special specialisation

The glass-walled high-rise tower above the port in Prague’s Holešovice district used to house the headquarters of Kovo, once one of the biggest Czech international trade companies. Today, the upper floor is home to the commercial department of OKD.

As a result of his busy in the steel industry is key. schedule, our interview with We must maintain a thorough OKD Sales Director Petr Otava knowledge of the market across took place in two stages. The the entire Central and Eastern 200 first began just after 7am, by European region; it’s crucial to long-term customers which time Otava had already know what our competition is buy their coal held his team conference. doing, particularly in Poland. from NWR. There certainly isn’t little to do. Do you always start this early? Which trends, apart from prices and production Very often. The day isn’t costs, do you need to inflatable and we have much monitor? that we must do. My staff are used to it. In the case of coking coal, What impact on your we primarily monitor supply negotiations do events in What exactly do you and demand that exists in the far away markets have? do during this time? market. If there are floods A layperson might think in Australia and the mines The markets are more and more that each quarter you are closed, the global supply open and so as the yield volume negotiate prices, renew of coal will fall. That is why falls in our specific region, we contracts and then we monitor how the entire are seeing a notable increase you have three months global economy is functioning, in imports of thermal coal peace… including the strength of the from the east, particularly from steel industry, construction Russia, and coking coal from The majority of contacts and other branches. In the the US. For example, today are indeed negotiated on case of thermal coal, the story Russian coal is traded monthly a quarterly basis, but we must is similar – we monitor the and primarily on the spot remain in day-to-day contact performance of the economy [a spot price reflects the price of with the market throughout. and with that related electricity a commodity in a specific time We must monitor global usage, CO2 credits and so on. and place and is determined on trends – Australia and America Apart from that, there are also commodity exchanges] and we if we are dealing with coking cement factories, which are must therefore know what coal, coal; Poland, Russia, Columbia, dependent on the performance in what quality and for what South Africa and Australia if we of the entire construction price our competitors are able to are dealing with thermal coal. industry. In the last three deliver, as well as their transport We need to know what will years, cement factories costs and all the other factors affect demand in the energy functioned at 30-40% of related to such acquisitions. industry and in all of industry. their capacity, due to a lack It is not enough to source For coking coal, the situation of demand. such information from various

Open Mine 1 I 2011 4 safety reclamations responsibility

mines is able to offer at any given time. The qualitative parameters of coal are a given, and we can only influence this very minimally. And our customers know this all too well, as we undertake long-term co-operation with the majority of them. Thermal coal is routinely graded along standards of heating ability, the amount of ash and sulphur – although, thus far, essentially no indexes exist for coking coal. reports, which we receive a year at the latest. We need and we take care of logistics, So customers know the specific daily; we can only gain this first-hand information and monitoring the train carrying quality of coal coming from, information by moving around there’s no other way to gain this the coal along its route until it for example, OKD’s Darkov or the market on a day-to-day than on the personal level. We arrives at its destination. Our Paskov mines. They won’t find basis. And that is why we have have to have people in our team business is only concluded at anything else like it on Earth – regular meetings with our that understand production the point where the customer even in OKD’s ČSM mine and customers and partners. and who know what producers pays for the goods. even, for example, in Australia. can and cannot afford to do on Coals from various locations are How many customers a given day. We prepare monthly And do your customers incomparable. Thus, customers do you personally devote plans of deliveries, but this must pay on time? buying coking coal are actually your energies to? also be updated according to buying a concrete “brand”. actual demand and the situation Yes, fortunately, they do. I do think, however, that within We have around 200 permanent in our mines. three years, we will see a new customers. I personally deal Do you always have at global index for coking coal. with around 50 of the largest How do you co-ordinate your disposal precisely ones. We try to understand the requests of customers what customers are What is the range of coal their situations and the level with the actual mining asking for, or do you types that you offer? of demand for their products. yield? tend to monitor what Things certainly do not function kind of coal your We generally define two types in the manner of simply closing The ideal situation is when colleagues in the mines of coal in our production: a contract and that’s the end we prepare a plan, an order happen to have come thermal coal and coking. We’ve of it. Each contract, even if we arrives from a customer, and upon and then make adopted this terminology in are not dealing with a concrete the official taking care of this efforts to try to sell that? order that foreign investors trade, is in essence a preparation connects with dispatching in can better understand us for the next negotiation, which . They then organise Naturally, we know what and so that our analysts can will take place in a quarter of loading at individual mines, our production at individual make comparisons with other

Open Mine 1 I 2011 5 economy interview technology

companies around the world. Does hardball negotiating angered or offended and decide Thermal coal in practice is prevail, or does it tend to to purchase elsewhere, but this represented by three main be a more friendly affair – doesn’t tend to happen much products – high-heat clean a kind of social game? in the coal business. We tend to coal, powdered coal and shed be careful in all circumstances coal. This is mainly used by It’s the same as with any when we are negotiating. The electricity plants, heating business. Of course, we want region only has a limited circle plants and cement factories. to sell at the highest price, and of purchasers and suppliers Coking coal is divided into two the customer wants to buy at and each dispute represents an main categories: hard coking the lowest price, but usually we unpleasant problem. We are coal and semi-soft coking coal. both understand that there is not in a position, as Australian an ultimate need to reach an companies are, to sell coal for Do you also trade in agreement. We have customers the same price to China, Japan, coke – what types who value the fact that we Korea, India, Brazil or wherever do you have on offer? conduct ourselves in a standard, else. We cannot afford to transparent and fair manner upset our customers – in lieu We divide coke into three basic for the entire duration of our of our geographic position, it types: metallurgical coke [used cooperation, and those then stay isn’t realistic to consider that in steel production], foundry with us, even when competitors we would transport our coal coke and then various kinds offer them somewhat lower somewhere far beyond the of heating coke intended for prices. Others may say that region. also important to note the kind industry, for example, for sugar this is the market price and of service we are able to provide refineries or lime works, but we will purchase elsewhere To what extent do spot to customers. For example, we also for the home too. Coke if you won’t give it to us. The prices play a decisive have “just-in-time” deliveries, production also leads to the negotiations can, for example, role, and what is the the maintaining of quality, and creation of a series of chemical last ten rounds, with exchanges influence of long-term a methodology for addressing by-products, which can then be of views via telephone on top ties with clients and an problems. This is something that sold, for example: coke-oven of that in cases when there’s above-standard service? our customers know well and gas, benzol, tar and others. a sense that we may be heading truly value. A quality service to a meeting where we will World spot prices and various increases the certainty that we Let us return to your price again fail to agree. We seek price indexes can provide will hold on to a customer, even negotiations. How long a compromise and in most cases a corroborative argument, but if a competitor offers a slightly does it usually take for we succeed in finding it, as long for us the price levels in the lower price. you to agree on a price as both sides understand what region are always decisive. If, for the next quarter with is market-based and reasonable say, the spot price is 100 and Who are the key players a client that you have from each party. Polish companies start selling that determine events on known for years? for half that, we have to factor the European markets Do you ever experience in the closest competition and where NWR operates? It’s all about the tactics one surprises during price the API2 price in Rotterdam uses in negotiating and it’s negotiations, the kind tends to provide more of an The market in coking coal different with each customer. that change your tactics assistive perspective. Other is strongly influenced It depends on how well we and approach to a given times, a situation can arise by global developments, know each other. Naturally, client? where both we and the Poles which means Australian or it helps when we know how have, by way of the influence of American producers such as a specific partner will behave The year of 2009 was a year production costs, higher prices BHP Billiton and Rio Tinto. during negotiations; how they that surprised many people, than the spot ones. Then we But we must always first think, what expectations they but that was an exception. have to calculate whether an follow what is taking place in may have at the start. Only After many years in the alternative exists on the market, Poland – what, for example, very rarely does it happen that business there isn’t much that for example, from Russia, in Jastrzębzka Spółka Węglowa, we reach an agreement right can surprise me. Of course, order to remain competitive in Katowicki Holding Węglowy or at the outset. occasionally a customer may be our prices. And not least it is Kompania Węglowa are doing.

Open Mine 1 I 2011 6 safety reclamations responsibility

I moved in 2000 to Prague and do more challenging things began working as an official until in the end I became in the fuel division. the manager and later managing director of the sales You did not wish to department. remain in Ostrava? Do you still discuss the Right until the moment of my market with your father? departure, I was an Ostravian Are there situations where patriot, but in reality I probably he can provide help? would not have remained there anyhow. I certainly We tend to dissect it from would not have been involved a wider perspective, what in the coal business, perhaps is going on in the steel and I would be working in trade, energy businesses and in the but likely in another industry, world and so on. He hasn’t or perhaps I would be involved been actively involved in the in economics and finance. coal industry for a number of years. If a person leaves So today you function the trade for, say, a year, then Thermal coal is a regional So he too started as in Prague? it’s no problem to get back matter and the market is a miner? into it, but it’s crucial to have witnessing increasing levels Yes, my base is in Prague. day-to-day contact with the of overproduction from He was formerly a mechanical I moved here and established market. Poland, while the significance engineer, working at Bastra a family. But I travel to Ostrava of Russia is also growing. [a Czech producer of mining as often as is required – Is it usual in your circles Conversely, South African, technology, once owned by almost every week. Friends that coal trading becomes Columbian or overseas coal OKD, now part of the Bucyrus have remained in Ostrava, a multi-generational in general, thus far, tends not company] and later worked but I don’t see them often. affair? to be imported at all into the in the management of the region. company. That was the first When you worked in the Certainly I know many such generation, at least as far as company led by your examples from Germany, What about Ukraine? I remember. Similarly, my father father, did you ever face Poland... Coal is a specific and also his brother studied prejudices that you were commodity and rarely does Ukrainian coal has a high at Báňská [VŠB – Technical your Daddy’s protégé? a regular person take an sulphur content and because University of Ostrava] and after interest in it or understand of environmental reasons it will that entered into the mines. It’s not particularly pleasant what the difference is between likely never be imported in large I only caught the scent in the when a son enters a company coal and coke. Very few quantities into the EU. This coal 1990s when my father, along headed by his father. But people are involved in the coal tends to be primarily utilised by with Mr. Koláček, privatised what is more important is business – in Europe it can’t be local buyers. the Czech-Moravian Mines and how the surrounding people more that a thousand in total. Metalimex. Back then, I was view such a person; how they It is, in essence, a specialised How did you come to studying business at Ostrava present themselves, how they business. work in the coal industry? and my studies had nothing work; they basically have to do with coal. My father to show that he is no worse What are the relationships Our family has worked at OKD offered me a position in the than the others and that they like in this business for several generations. My sales department of Metalimex, will bring something to the community, is it easy to grandfather spent practically which was a specialised team. I started from scratch, make friends or is it more his entire life in the Ostravian company within OKD tasked processing invoices, orders and of a pragmatic friendship, mines. In the 1980s, he was with sales responsibilities. back office work. Gradually, based on commercial the director general of OKD. So after finishing my studies, I gained the opportunity to needs?

Open Mine 1 I 2011 7 economy interview technology

It’s a relatively small circle of I mainly play in the Czech more complicated. he brought in new people, people and they tend to see Republic and Spain. such as Míla Trgiňová [OKD each other often, so it isn’t Was it a major change finance director]. I am glad difficult to build personal Can you manage to when OKD was that I can work with him and contacts and friendships after leave work behind while incorporated into that he showed me what can a time. But it isn’t possible playing golf? Or is golf an the structure of NWR be done with the company. to be friends with absolutely instrument of work? and many things began Certainly, he was helped everybody. to be viewed from a new considerably by the situation Many trading partners play perspective? in the market and the price of Is it difficult to leave the game. And anyone who coal, otherwise, he could not friendships behind when knows golf will tell you that It was certainly a change, have afforded to change the tough price negotiations amidst the enthusiasm of if only for the new people company at the pace at which are taking place? a golf game, you won’t find that came into the group. he did. Nonetheless, he has a good venue to discuss Klaus-Dieter Beck, Mike my enormous respect for the serious issues. Although at the Salamon and Hans-Jürgen manner in which he carried »The market in coking proverbial 19th hole, meaning Mende, for example, as well out these changes. coal is strongly the clubhouse, discussions as other notable figures. do frequently turn to business. In short, people who could If OKD was not a member influenced by global view business from a global of the NWR group, developments, but we Where do you travel on perspective. In many areas, could it still afford major vacation most often? I had to adapt and undertake investment projects must always follow some additional learning, such as POP 2010, or to what is taking place We travel regularly to Spain. for example, in international consider acquisitions And during winter we financial terminology, which, in the Polish mining in Poland.« always go skiing for a week until that time, we had never industry? in St. Moritz, while we also used. But Zdeněk [Bakala] and try to arrange at least one Peter [Kadas] [NWR directors Such considerations with Friendships can’t be applicable summer holiday. and representatives of the regards to Poland were already in such circumstances. Even Company’s largest shareholder] here beforehand, but they your best friend will sometimes Who at home decides perhaps knew that I was never really got going. And take offence, get up from the where the holidays able to view the coal and talking about investments and table and storm out of the will be? coke markets from a wider their financing, OKD never room. We calm such incidents perspective than the Ostravian had a team that was able to down later, once cooler heads We decide together. We always one alone. I owe them both go and raise money from the can prevail. try to choose somewhere a great deal for giving me this financial markets – to go to where we haven’t yet been. opportunity. the major banks in London and How do you spend so forth. Our colleagues from your free time? Do you If you could change And from the point NWR know how to do this, and actually have any time anything in your current of view of OKD and it helps tremendously. Banks left after all that work? professional or personal someone who has truly and institutional investors life, what would it be? known the company for already view NWR differently, Not much. I continue to think a long time, what has because it is on the stock about how to free up some I’d probably try as soon as changed now? exchange. If I compare it to time. I have a small son, so possible to work outside in the situation five years ago or I at least try to make time at a larger company in a more Changes came along with 10 years ago, then today we weekends. Recently, I’ve also developed market. You can’t a new chief executive, Klaus- have far different and wider started playing golf. buy those kinds of experiences, Dieter Beck. He changed the opportunities than was ever and the sooner you gain them, company from A to Z, from the case in the past. Where do you enjoy the better the dividends they the company culture right playing most, in the Czech pay later. Today, I have, after all, through to a new system of Republic or abroad? a family, a kind of foundation, management. This was also so similar considerations are enhanced by the fact that

Open Mine 1 I 2011 8 safety reclamations responsibility

Safety levels improve at NWR mines

Employee safety is an absolute priority for NWR. That is why the Company continues to work at improving safety standards and reducing the risk of occupational injury at its subsidiaries OKD and OKK Koksovny. Key safety indicators for 2010 illustrate a positive trend, demonstrating the merit of measures and initiatives designed to put the Company on the right path where safety is concerned.

The number of reportable prompted to maintain constant and safety issues and has injuries in NWR mines awareness of possible risks and become one of the pillars continues to decline of their responsibility for their of corporate governance -49% own safety and that of their within NWR. The number of reportable colleagues. The number of reportable injuries at NWR subsidiary NWR is aware that employee injuries at NWR mines OKD decreased last year Company management, the motivation is a key factor in decreased by half during by 22 per cent from trade unions and the relevant increasing employee safety. the last five years. 346 recorded in 2009 to 271. governmental authorities Responsibility for safety The LTIFR indicator (Lost Time treat every accident with rests on the shoulders of Injury Frequency each individual Rate) fell from employee. With 11.29 recorded in LTIFR OKD these points in 2009 to 8.61 last 20 mind, the company year, exceeding the 16.59 announced 15.33 target set for 2010. 15 a motivational This data includes 12.49 competition in contractors as well 11.29 2010 whereby 10 as employees. 8.61 every employee had the chance to The LTIFR is an win a Škoda Fabia 5 internationally used car in a lottery injury frequency based on lack of indicator that is 0 injury. Moreover, used to measure 2006 2007 2008 2009 2010 each mine held its developments in own prize draws in occupational safety. which people could LTIFR represents the number of reportable injuries In simple words, it divided by millions of hours worked win holidays worth can be explained CZK 50,000. More as the number of injuries per the utmost seriousness than 15,000 OKD and contract one million hours worked and conduct thorough employees took part in these that result in an absence from investigations. They submit any competitions. work that lasts at least three resulting recommendations working days. to the Health, Safety and NWR has also announced the Environmental Committee “Safe Workplace” motivation All NWR mines and coking (HSEC), which then proposes programme for its mines. plants have implemented very additional risk elimination This aims to maintain order specific safety regulations, measures. Since its inception at the workplace, rectify processes and monitoring in 2007, the Committee has insufficiencies and eliminate systems. Employees are overseen occupational health risks. Teams involved in mining

Open Mine 1 I 2011 9 economy interview technology

operations are regularly (with CZK 15,000 and CZK evaluated (at least six times 10,000 awarded to the second per quarter). Checks are and third-placed teams, made on the orderliness of respectively), and the best workplaces and access routes, equipping and disposal team and on the management of CZK 30,000. mine work, ventilation and the maintenance of machinery SAFETY 2010 and electrical equipment. The best excavation team was Under its SAFETY 2010 awarded CZK 50,000, the best programme NWR invested preparation team CZK 20,000 more than half a billion Czech

Quantity 2008–2010 Personal protective clothing and equipment (Safety 2010) Footwear 38,963

High-visibility t-shirts 60,092

High-visibility shirts 111,384

Overalls 57,283

Protective helmets with visors 15,197

Personal lamps T 1005.1 15,363 Indication and detection device 823 Dräger X-am Self-rescue device 15,000

The largest purchase of the protective equipment in executed by OKD

Parameters of personal protective equipment

Personal lamp T 1005.1 With dimensions 12×2×10 cm it is approximately 70% smaller than the older types used, and weighing 0.8 kg it is also a kilogram lighter. LED diode with 2,500 lux luminance The luminous power is guaranteed for at least10 hours of use The head is fitted with a passive antenna. The dry monocell is connected with the head via a cable with a reflective surface – making workers more visible when illuminated by their colleagues. The lamp switchover also demanded the replacement of all 420 recharging stands.

Lamp K 07 Maintenance-free battery and LED diode Suitable for mine trains, transportation of explosives and mining works 500 lamps replaced

Open Mine 1 I 2011 10 safety reclamations responsibility

crowns in the acquisition of the most up-to-date work gear and protective equipment for its employees. Deliveries of the new equipment commenced in 2008 and the equipping of employees was completed in 2010. The new clothing and equipment have contributed to increased safety underground as well as an improvement in the working environment. The distributed gear is first class, and is used in the most developed mines worldwide. “To follow up on our exceptional investment, we must continue to monitor potential risks in order to eliminate them with ever more effective safety and hygiene measures,” says OKD Chief Operating Officer Leo Bayer.

Reflective elements, quality footwear, much lighter equipment. The gear is first class, comparable to those in Western Europe and USA.

Indication and detection device Dräger X-am Working overalls with reflective stripes Measures and monitors the presence of life-threatening gases Complete replacement of working overalls with new ones fitted

at mine heads (CO, CO2, CH4, NOx) and longwalls (CO, CO2, CH4). with reflective stripes to increase safety Significantly smaller and lighter than the older equipment Silver and yellow reflective stripes – GP 105 Continuous measurements of dangerous gas concentrations, More comfortable cut and longer fastening strings with recording and storage of the measured data Optical and acoustic alarms T-shirts and shirts Cotton t-shirts and shirts with reflective, Self-rescue device OXY K50S high-visibility stripes Service life of 10 years (three years more than the previous equipment) Protective helmets Independent of the ambient atmosphere with a self-contained with visor alternating breathing system Protective helmets With a weight of 3 kg fitted with visors, HC The volume of the breathing bladder is at least six litres 600/4 made in the Protection time: 50 minutes UK, and Unierg Bieruň Maximum temperature of inhaled air 55 °C from Poland

Working footwear Complete replacement of work boots Three types of footwear: Bata Malenka S3, Bata Jano S3 and Artra Bridget.

Open Mine 1 I 2011 11 economy interview technology

Continuous Improvement

NWR’s Continuous Improvement programme enhanced safety and reduced costs in 2010, prompting the Company to ensure that the Continuous Improvement programme runs this year too. Suggestions for innovation can be now submitted in four languages.

work easier and safer was A significant new element serious about the emphasis on rewarded by the Company. is the possibility to submit work safety and our employees’ innovation suggestions in four involvement in improving Motivation to participate in languages – Slovak, Polish and production and the working the project was strengthened English as well as Czech. environment,” Bayer points out. by a special prize draw for a Škoda Fabia car. Every The level of the reward for the First-aid cards – a employee who provided a innovator is directly linked suggestion leading to valuable suggestion had the to the level of the saving the improved safety chance to win the car. At proposal has brought to the individual mines, Ondřej Škorík, an operation the successful Continuous locksmith of the Paskov innovators had other Mine, came up with four Employees submitted hundreds Improvement of innovation suggestions. opportunities to in 2010 innovative suggestions be rewarded: prize within the Continuous draws for holidays, Improvement programme. innovation NWR places great emphasis on TV sets or notebook 806 One of them has received suggestions its employees’ own initiatives, computers. general implementation. “I was ideas and creativity. That is inspired by the first-aid kits why in 2010 it announced for “The programme CZK 2.85 million for cars, which according employees of mines and the has clearly been a motivation rewards to a new regulation must companies supplying them success. In addition include a “first-aid card”. the Continuous Improvement to enhancing the CZK 226 million So I suggested furnishing our motivation programme, the employees’ co- company savings mine first-aid kits with such aim of which is to encourage responsibility and cards too,” said Škorík. the submission of innovative sense of belonging ideas and suggestions. “With to the Company, it has resulted Company. This year too, all “Supplementing the first-aid clearly set rules and an in employees receiving special those submitting suggestions kits with the first-aid card is evaluation and remuneration rewards, increased work will have the chance to win a extremely useful when the system, this programme has safety, an improved working special prize: a Škoda Fabia. injured person is provided resulted in a higher quality environment and lower costs first aid. In educational and of ideas and the wider for coal extraction. That is why “The parameters have changed promotional terms, it is involvement of employees,” the company has prepared slightly, yet the basis remains advisable to place these cards said Leo Bayer, Chief Operating for 2011 another, similarly the same: Our objective is to on safety notice boards,” Officer of OKD, a subsidiary oriented, programme,” said Leo support employee initiative. The Zdeněk Potenský, the head of of NWR. Bayer. project has shown that we are the Paskov rescue team, said.

fficiency and safety 2011: Continuous One-off benefit or saving resulting from Improvement goes on Reward: implementation: Each group and individual who in 2010 came up with The programme exemplifies CZK 0–200,000 CZK 2,000–3,000 a valuable idea of how to co-operation between the CZK 200,000–500,000 CZK 3,000–8,000 improve work and increase Company and its employees: CZK 500,000–1,000,000 CZK 8,000–10,000 the efficiency of coal employees’ engage with CZK 1,000,000–10,000,000 CZK 10,000–50,000 extraction, improve the the Company and there are working environment, make benefits for all parties. CZK 10,000,000 and more CZK 50,000 and more

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Returning the landscape to nature

NWR is keenly aware of its responsibility for changes to the landscape that have occurred Case study as a result of underground coal extraction. Dinopark

the area is a functioning self- The space beneath the spoil heap sufficient ecosystem with in the vicinity of the village naturally indigenous animal of Doubrava was originally and plant life. These have earmarked for further dumping been gradually returning of tailings. With regard to the to these areas, giving rise to fact that the area was not used a new ecosystem in which for a long time, it was exposed precious fauna and flora to uncontrolled accumulation of occur. In comparison with various materials, including illegal the alternative opinion of waste dumping, and gradually some environmentalists, who became overgrown with self- claim that the ideal solution seeding woody species. is to let nature cope with the consequences on its own, As a result of the reduction of despite its costliness, NWR’s activity at the Doubrava Mine, approach is the fastest way of reclamation of the space was returning nature to landscapes launched. It entailed a thorough affected by mining activities. “clean-up” and reshaping of the area, with subsequent covering “The decision about how with a layer of earth. The modified the areas would look after ground was newly planted with reclamation and what their grass and woody species. New lakes, forests and meadows grow in Karviná region. further use would be is always Heaps of waste rock rapidly disappear. taken by the councils of In 2009 the biological reclamation That is why the company has projects took place in the area individual municipalities. All was completed in the bulk of implemented a number of of 860 hectares. The total the works are overseen by the area and land was leased projects aimed at mitigating costs amounted to almost the environmental protection out for the purpose of building the consequences of mining CZK 265 million. The Darkov authorities and we place great the Dinopark. The complex was activities, with the most Sea area near Karviná, for emphasis on the projects’ opened in July 2009 and became a significant being land example, is the result of the environmental dimension,” significant attraction of the region, reclamation. NWR pays great biggest reclamation project Tabášek explained. one frequently visited by families. attention to the regeneration in Moravia and and of individual areas affected possesses the potential to Since 1989 the total costs by coal mining. become an attractive leisure for reclamation in the OKD Technical reclamation: and recreational destination mining district have amounted 2007–08 Owing to land reclamation for the people living in the to CZK 4.25 billion. Almost Biological reclamation: projects, the landscape in the region,” said Radim Tabášek, CZK 3 billion was laid out by 2008–12 Karviná and Ostrava regions has staff manager responsible OKD itself, while CZK 1.26 changed considerably over the for land reclamation projects billion was financed by the Estimated costs: past few years. The improved implemented by OKD, state within the Reclamation CZK 7 million situation is documented in a subsidiary of NWR. of the Moravia-Silesia Region Financing source: OKD a new publication, “We’re programme, launched in 2003 Area: 15.1 ha Returning Life to the The objective of land and aimed at eliminating the Reclamation’s objective: Landscape”, published by the reclamation projects is to damage caused by mining Public greenery Company. “In 2010 alone, return the landscape to its before 1992, i.e. prior to OKD’s 55 large land reclamation natural condition, whereby privatisation.

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Mining for coal

Thanks to its qualities and use in diverse industrial sectors, hard coal remains a strategic resource for the future. Experts estimate that worldwide hard coal reserves amount to approximately 479,000 million tonnes. Coal mining is expected to continue for another 200 to 300 years with efficient, economic and profitable processes sustained by the dynamic modernisation of mining technologies.

How and where is hard are obtained from the mines: that would have made it coal mined in the Czech thermal coal, used as fuel impossible to exploit the Republic? with a high heating power, reserves due to efficiency, mil. and coking coal, used in safety and technological 11.4 In the past, there were several the production of coke. constraints. tonnes of coal operating hard coalfields in Another NWR subsidiary, produced by OKD the Czech Republic (Pilsen- OKK Koksovny, a.s., is the The Ostrava-Karviná hard in 2010. Manětín, Kladno-Slaný and largest European producer coal district ranks among the others). Following the winding of foundry coke. world’s most demanding to up of coal mining operations in exploit. This is mainly due to these fields during the 1990s, Specific features of the geological conditions with the only remaining hard coal Ostrava-Karviná hard frequent tectonic faults mining district in the country coal district crossing the coal strata at is Ostrava-Karviná in the depths where the coal is southern part of the Upper Implementation of an extracted. The average depth Silesian coalfield. The major ambitious investment project, of mining in the Ostrava- part (approximately 80%) the Productivity Optimisation Karviná district is 930 metres is situated in Poland. below ground. The district yields The deepest quality hard coal Coal mining pit, Doubrava with a low sulphur in Northern Moravia III at the content and high Karviná Mine, carbon content, 121 km2 is 1,177 metres which is sourced size of mining area deep, while from four mines the deepest operated by NWR operated level, subsidiary, OKD, a.s. 930 m in the Paskov average depth of extraction of coal Mine, has an Mining in the Ostrava absolute depth area was terminated 0.8–6.5 m of 1,120 metres in the 1990s, with below ground. seam thickness the remaining operating mines Coal mining in located in the Karviná the vicinities and Frýdek-Místek districts Programme 2010 (POP 2010), of Ostrava and Karviná of the Moravian-Silesian saw the equipping of NWR has a tradition reaching Region. In 2010, OKD produced mines with the most up-to- back several hundred years. approximately 11.4 million date mining and longwall Systematic mining in the tonnes of coal at these mines. technology. This technology district began in the mid- ensures continuous access 18th century, and developed In simple terms, it can be to coal reserves at greater into regular mining operations said that two types of coal depths and under conditions in the 19th century with the

Open Mine 1 I 2011 14 safety reclamations responsibility

There is a long journey between the initial intention to mine for coal and the arrival of the first tonne at the surface

accordance with information on the deposit. The first pit is used to transport the mining crews and material, while the second serves for the removal of excavated material. The design of the pits is of fundamental growth of ironworks and The survey from the surface such possible negative importance for the ventilation the evolution of the railroad is then supplemented with effects. The law therefore inside the mine. One of the network. an additional underground requires the development pits therefore acts as the exploration, which specifies of an Environmental Impact downcast airshaft, bringing The Ostrava-Karviná district the extent of the reserves in Assessment, typically referred fresh air underground, with holds 90% of all hard coal the mining area. to as an EIA. the other utilised as the reserves in the Czech Republic. upcast airshaft. The latter In line with valid legislation, Coal strata are mostly located is fitted with a heavy-duty From stating an intention a mining area is delimited for horizontally in the Ostrava- ventilator. This arrangement to actual mining each mine where hard coal Karviná district. The height of is essential for safety in the and possibly carboniferous the strata ranges from 1 metre mine especially with respect There is a long and natural gas can be exploited. to 6.5 metres, with seams to the mine gas (also called complicated journey that The opening of a mine must exploited at greater depths, firedamp) and air conditioning winds between the initial be preceded by the meeting of at the Staříč site and in the within the mine. intention to mine for coal and stringent legal requirements Lazy Mine, found in strata with gas (traditionally linked to coal pertaining to relationships heights from 0.8 metres to When a mine is opened for deposits) at any given site and and circumstances of the 1.3 metres. exploitation, the deposit the arrival of the first tonne at exploration and mining that is split into horizontal the surface. How is hard coal must be agreed with local NWR mines for coal in nine levels, with the excavation mined and what precedes the government, residents and mining areas spanning commencing between the actual mining? authorities that administer territory of 121 km2. The coal first and second levels from the area of environmental reserves in NWR mines were the top downwards and from In order to locate a deposit of protection. approximately 206 million the mining area boundary hard coal and make a qualified tonnes at the end of 2010. towards the pit. The levels judgement as to the extent An application for a mining are divided by cross-cuts and quality of the deposit, permit must be preceded by Mining for coal made in rock and passing it is first necessary to create a demonstration that any across the seams to ensure a geological survey bore that exploration and mining activity Following the satisfactory their stability. The cross-cuts is drilled from the surface. will not cause significant resolution to all the legislative also divide the space from The survey helps to define negative effects that impact requirements related to the the mining area boundary what the deposit contains, on the local residents and possible commencement of to the pit. An air slit is also facilitates calculations on the the natural environment, mining at a given site, two opened between the levels extent of the reserves and and that the mining entity pits are excavated in the to ensure correct ventilation. determines the mining area. is capable of eliminating most suitable locations in Mining galleries are then

Open Mine 1 I 2011 15 economy interview technology

the new longwalls achieved an average daily production of 2,800 to 3,000 tonnes of coal per longwall in 2010. Some longwalls accomplished peak daily production of up to 10,000 tonnes, while the average daily production per longwall in NWR mines, combining old and new technology, has increased by 15% to 1,743 tonnes. The introduction of new technologies has clearly had a positive impact on the performance of the mines.

Longwall mining

Longwall mining takes place from the border of the mining area towards the pit. The World giants as Bucyrus, Deilmann Haniel and Sandvik and local engineering companies mined space is subsequently were among the key suppliers of mining technologies for OKD filled with the use of a controlled cave-in, which is the reason why underground interconnected with the Technological revolution strata of the Ostrava type. mining sometimes manifests subsequent installation of in NWR’s mines Over the past three years, itself on the surface. This longwall technology. After NWR has invested nearly why the commencement the completion of one Coal in the Ostrava-Karviná CZK 10 billion in purchasing of mining at any specific longwall, new galleries are district is most often exploited the most up-to-date mining location is preceded by the cut and a new longwall is using longwall complexes, and longwall technology. The drawing up of a “subsidence started. with coal ploughs used in company acquired 12 longwall map” specifying the locations complexes manufactured by of likely subsidence. Mining Bucyrus, 13 mining complexes operations are also preceded Current type Unit with a comprehensive support by the purchasing of land and SANDVIK AM 50 system made by Sandvik and premises where the negative Weight t 23 12 traditional tunnelling sets effects of mining are expected comprising a cutting machine to materialise. Total power kW 155 and a loader manufactured by Unit perfor kW 100 Deilmann Haniel. Mechanised The excavated coal is supports are used to fortify transported by conveyors Voltage V 500 the longwalls. to a storage space through the mine works. The coal Diameter of the insulating head mm 650 The Ostrava-Karviná hard coal is then transported by Maximum profile m2 16 district is also distinct in that a mine train or a conveyor it operates an average of five to a skip pocket near the Maximum hardness of rocks MPa 80 longwalls per mine, while the upcast airshaft. Skip buckets, Maximum inclination of the face o 16 usual concept practiced around carrying approximately 20 to the world is “one mine, one 30 tonnes, are then used to New mining technologies in numbers. longwall”. transport the coal to the surface and unload it into For a better understanding: a skip plant on the surface.

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Coal in the future Coal mining is inevitably the effects of previous mining linked to seismic shocks, activities. resulting from the release of energy accumulated Modern processing plants fuel in the rock massif due to do not produce sludge; on the In the future, liquid coal fuel could changing stresses caused by contrary, reserves of middlings replace some types of oil fuel. mining activities. Seismic from outdoor tanks are utilised phenomena have been part as a resource available mainly and parcel of mining since for the energy sector. its very beginnings. They electricity result from excavated spaces Technical closure of Coal is a key source of electricity and its created by mining performed a mine importance will grow as the gasification over more than a century, as of coal and the use of more efficient well as the depths reached The completion of mining and cleaner methods of burning coal by mining and the solid rock at a mine is followed by becomes more widespread. material in the exploited the technical closure of the strata of the active parts site. This process requires an of the mining district. The emphasis on safety in relation materials of frequency and degree of to other active mines. Mining seismic activity is monitored areas in the Karviná region the future over the long term and are adjacent to one another. evaluated for the purposes It is therefore imperative Carbon is an element which easily of adopting corresponding that interferences, such as bonds with other elements to create a wide variety of compounds. Plastics, shock-prevention measures flooding, are prevented. When fertilizers, medicines and many other during mining and tunnelling. a mine is being closed, all materials and products are borne from environmentally hazardous carbon chemistry. As oil reserves decline Coal processing equipment is removed from and oil prices rise,, the use of coal as the mine. The main mine the basis of alternative fuel oils will Raw coal is transported from works – the pit – is filled with become more compelling. the skip plant via a conveyor rock or a cement and fly ash to the processing plant. mixture. Here, coal is passed over separation screens and is Following the termination sorted according to size in of mining operations, mines an exceptional heating value. Hard coal as a strategic a heavy fluid and in washboxes spontaneously flood with During mining, the gas seeps resource for the future or in cyclone separators. This groundwater, usually of from the rock in which it is process separates coal from high salinity. Measures are bound. A proportion of the With respect to the diminishing rock residues. Wet coal is therefore implemented gas, diluted by ventilation oil reserves, hard coal is then drained in centrifugal to prevent the seepage of in the mine, is released considered a resource for the separators and filters, or in firedamp to the surface, naturally from the mine future, with a broad range a drying plant, where it is dried in order to protect surface via the upcast airshaft. of industrial applications. with hot air. structures and other assets. Firedamp and air mixture, Attention is especially focused with concentrations from 5% on the efficient utilisation At the processing plant, coal Firedamp to 15% of firedamp, is highly of coal energy in advanced is separated from tailings. explosive. A proportion of combustion in power plants. Tailings are partly used in the Firedamp is a byproduct of the firedamp is extracted via Experts are also seeking construction industry. For coal mining and manifests degassing bores and degassing methods to convert coal into example, the Paskov Mine a different composition to pipes in the upcast airshaft environmentally acceptable sold nearly one million tonnes the natural gas that comes to a degassing station on quality fuel for vehicles. Coal of tailings for construction with crude oil. Firedamp, also the surface, where the gas may also be required in the purposes last year. Tailings called “carboniferous natural is purified and supplied to future to replace oil in the are also used in reclamation gas”, comprises more than the network for subsequent chemical industry as well as projects designed to rectify 90% methane, which offers utilisation. in other sectors.

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Coal on the world markets

There have been a number of significant developments unfolding within the international coal markets over the past few months which have put the commodity under the spotlight.

Supply disruptions, resurging demand, rising prices and new contracting systems have shifted the dynamics of coal markets across the world. How coal miners and their customers respond to these changing circumstances will have a very real impact throughout the economy.

We are now seeing China, and to a lesser extent India, dominate the demand for internationally traded coal as their rapid industrialisation and development require vast Last year saw the majority of contracts settled from quarter to quarter amounts of raw materials. China, for instance, is now producing almost half of the world’s steel Seeing an opportunity to majority of contracts settled output, putting ever more benefit from these rising from quarter to quarter. This pressure on the supply and price prices, the large global miners trend is being taken a step of coking coal. Added to this, have been pushing their further with BHP Billiton recent flooding in the Australian customers towards shorter- currently trying to negotiate state of Queensland severely -term contracts. Whereas their coking coal contracts disrupted coking coal supplies to coal has traditionally been on a monthly basis. However, Asia causing spot prices to peak negotiated over yearly the steel producers have come back towards new record highs. contracts, last year saw the out strongly against such

Steel Production in NWR Customer Markets 8 7 6 5 4 3

Million Tonnes 2 1 0 10 Jul-10 Jul-08 Jul-09 Jan-11 Jan-10 Jan-08 Jan-09 Sep-10 Sep-08 Sep-09 Nov-10 May-08 May-09 May- Mar-10 Mar-08 Mar-09 Nov-08 Nov-09

Countries included: Czech Republic, Poland, Slovakia, Austria, Germany. Source: World Steel Association

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record profits being generated by some of the large mining South Africa: The emergence companies. This has led to anticipation within the of a new state-owned mining industry of a renewed round company of consolidation as companies look to maximise their bloated cash flows. A recent example was the $8.5 billion acquisition of Massey Energy by Alpha Natural Resources. More merger and acquisition activity can be expected this year.

Although somewhat isolated from these international In February, President of the Republic of South Africa Jacob trends, NWR’s markets in Zuma opened the state-owned African Exploration Mining Central and Eastern Europe are and Finance Corporation, based in Ogies in the province being influenced to a certain of Mpumalanga. The new company is to become one of extent. Coal prices in the the five largest local coal producers by 2020. It instantly region have been rising in became the target of fierce criticism from the Federation response to the international for a Sustainable Environment and the National Union of supply constraints while Mineworkers. The criticism centred on the potential impact contracting of coking coal the enterprise could have on the environment and on the has seen some movement lack of consultation prior to the corporation’s establishment. towards quarterly pricing. Prices are also responding to The first project that the enterprise is set to pursue is the renewed economic growth in Vlakfontein coal mine, with an envisaged annual production the region as heavy industry is of 800,000 tonnes of thermal coal and jobs for 120 people. benefitting from strong export The coal produced will be supplied exclusively to domestic performance, particularly power stations, which currently consume about 115 million in Germany, with steel tonnes of coal per year. It is expected that by 2018 their production and utilisation annual consumption will be 250 million tonnes. short term pricing claiming rates almost returning to that it will make it impossible pre-crisis levels. Consolidation The state-owned enterprise intends to produce 10,000 to for them to plan and budget within the region is also 15,000 barrels of synthetic crude oil from coal in a new for their production cycles. looking more and more likely plant, employing 1,000 people. The company does not rule A standoff between these two as the Polish and Ukrainian out a diversification of its portfolio into limestone, uranium players is looking likely during governments are eager to and metals production. Expansion into other African the course of 2011. continue their economic and countries is also contemplated. industrial reforms through the A further consequence of privatisation of state owned Source: iAfrica.com Miningweekly.com, 26./27.2.2011 these booming prices is the companies.

International Spot Coal Prices Coking Coal Imports

350 60 300 Coking Coal (FOB Australia) 50 Thermal Coal (CIF ARA) 250 40 China India 200 30 150 US $/t 20 100 Million Tonnes 50 10 0 0 10 2003 2004 2005 2006 2007 2008 2009 2010 Jul-10 Jul-09 Jan-11 Jan-10 Jan-09 Sep-10 Sep-09 2011*e 2012*e Nov-10 May-09 May- Mar-10 Mar-09 Nov-09

Source: AME, Platts *e – estimate. Source: AME

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OKD Foundation to distribute CZK 60 million this year

The OKD Foundation, the second largest corporate foundation in the Czech Republic, will distribute around CZK 60 million to municipalities and non-profit organisations this year. It will specifically focus on providing support to sheltered workshops and other means of employment integration for the disabled. The foundation stands ready to disburse up to CZK 10 million in this area.

Sheltered workshops provide an support other organisations opportunity for the integration that provide employment of disabled people into integration for disabled people. everyday life. The foundation’s The OKD Foundation support will be directed to As in previous years, the OKD institutions run by non-profit Foundation will also continue The OKD Foundation was established in early 2008 organisations, communities to support a range of other to support and develop spiritual and humanitarian and municipalities. „Important publicly beneficial activities. values, environment, education, sports and cultural income for every sheltered It will particularly support activities and social and medical services. The OKD workshop is made up by projects in the health and Foundation’s key objectives also include providing a contribution from the social spheres, but it will also support for the North-Moravian region, including unemployment office. But this invest in cultural development mining traditions, and assisting non-profit-making contribution will be decreased and regional traditions, leisure organisations in processing European projects. this year in connection with activities, restoration of the With the amount of distributed funds, the OKD cutbacks in the national environment and cultural Foundation ranks among the largest corporate budget. Therefore we wish to heritage. Moreover, roughly foundations in the Czech Republic. use grant assistance to help 80 percent of the provided the workshops maintain jobs funds shall stay in the 800 projects granted for the disabled in this difficult Moravian-Silesian Region. CZK 123 million paid economic situation, and 4 basic grant programs possibly even create some new The Foundation is also positions,“ said OKD Foundation continuing with a special effort Emergency fund for all unexpected director Jiří Suchánek. which is unique within the emergency situations as flooding whole country – the provision In the Moravian-Silesian Region of support to organisations alone, as of the end of 2010, and municipalities that example, we contributed CZK the development of a centre there were more than 10,000 are striving to obtain 50,000 to the Nová Paka- for the disabled and senior disabled people without work, financing from European based civic association Život citizens. What’s more, there a number that is equivalent Union funds while lacking bez bariér (Life Without have already been several to almost 13 percent of the sufficient finances to enable Barriers) for the preparation such applicants that have region’s total unemployment the preparation of studies of a European Union-grant successfully obtained an EU figure. In addition to helping and other administrative project application. And indeed, grant thanks to support in this sheltered workshops, the materials required by the they succeeded in obtaining way from the OKD Foundation,“ foundation also wants to EU fund administrators. „For almost CZK 30 million for observed Suchánek.

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Miners donate CZK 352,000 to St. Barbora, the highest sum ever

OKD employees donated CZK 352,000 to the Saint Barbora Civic Association in 2010, almost a hundred thousand Czech crowns more than they gave in the previous year.

Workers of individual mine economic crisis would produce collected money goes towards shafts raised the highest the opposite effect on the tuition, accommodation at Občanské sdružení amount in company history at tally. But the miners showed student dormitories, school svatá BARBORA traditional „Jumping over the their solidarity again. They equipment, skiing courses, leather apron“ events, at which do not want to save money at summer camps and medical St. Barbara Civic new mining guild members are the expense of the children of assistance for the children. „We Association enrolled and the concluding year their former colleagues,“ said also pay for monthly language is evaluated in an entertaining association vice chairman Josef courses abroad or sometimes Helps children who lost fashion. The association, known Hoďák. The highest sum – almost a driving school course, among one parent in work- by miners as ‘Barborka’, provides CZK 109,000 – was raised at other things, so that we can help related accidents, funds for mining orphans to help the apron jumping occasion of prepare children to successfully mostly in mining support their education, leisure Darkov Mine. begin an independent life,“ industry. Currently, and health care. explained Hoďák. the association takes Barborka last year distributed Saint Barbora Civic Association care of a hundred of „Raising funds for Barborka approximately CZK 2.5 million had 87 children recorded for Czech, Slovak and is a traditional part of the to assist the orphans. In addition assistance last year, three less Polish children, which jumping over the apron events, to what the association collects than in 2009. The number has contributes to their with each shaft always raising from the mine employees, it gradually fallen in recent years, studies, leisure activities tens of thousands of crowns. receives contributions to its in line with the positive impact and supports the care of However, this year’s level of budget from association member that OKD investments have their health. donations really surprised me, as companies, the OKD Foundation, had on the number of fatal I had thought the ever present sponsors and OKD managers. The accidents.

Open Mine 1 I 2011 21 An important employer Prospects

OKD Foundation The most An important modern payer of taxes technology Regional Investment development

Domestic Company Economy Industrial uses

Export Energy industry Steelmaking

Paper industry Cement industry Aluminium production Chemicals Pharmaceuticals

On a fi rm footing NWR is the only company in that mines hard coal in the Czech Republic. Hard coal is an important raw material for the energy industry and for the steel industry and related sectors. We provide work for tens of thousands of people. Our subsidiary OKD is one of the largest employers in the country and one of the biggest contributors to the state budget. We maintain the highest international standards in mining technology, safety, and business management. We endorse the globally shared principles of corporate responsibility. We believe that our business has long-term prospects. We are prepared to share these prospects with our employees and the communities in the regions where we operate.

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