Sodium Cyanide Production

October 2013

1 Cooperation Offer

One of the main assets of Kazakhstan is its mineral resources. Out of 105 chemical elements in the Mendeleev's Periodic Table, 99 elements have been identified in the soil of Kazakhstan, reserves of 70 elements have been explored, 60 chemical elements are used in manufacture.

Out of 11 billion tonnes of minerals recovered worldwide, 250 million tonnes are recovered in Kazakhstan, which makes Kazakhstan the 11th place in the world rating. Kazakhstan ranks from 1st to 19th in production of 37 types of raw materials. Kazakhstan has large resources of phosphorites, sulphur, potash salts and other mineral raw materials, on which the chemical industry can be based.

Approximately, deposits of 4 potash salt-dome structures presented for exploration are generally assessed as more than 1 bln.tonnes of ore.

Desired investment for exploration is assessed as $15-20 mln. for each structure.

2 Benefits

We consider that the investment project has significant benefits:

1. Access to mineral raw materials The salt-dome structures presented for exploration are located in one of large potash fields in the world – the Caspian Depression. Its halogenous formation is defined by most complete series of sedimentations and represented by carbonates, terrigenous-carbonaceous, carbonate- sulphate, sulphate, chloride-sulphate and chloride sediments.

2.Creating favorable conditions for direct investments Along with creation of general favorable environment, special conditions will be created for large and transnational companies implementing projects within the Republic of Kazakhstan. For investment projects in the priority sectors –investment preferences provided by the Law of the Republic of Kazakhstan “On investments” and special procedures for issuing entry visas for foreign experts on an immediate and gratis basis. For large and priority investment projects in partnership with acknowledged foreign investors and transnational companies, separate investment agreements stipulating special measures of government support will be made: tax benefits and preferences; Конфиденциально providing minimum long-term government order and order of national companies; other financial and nonfinancial incentives. Decisions on these support measures in the context of investment agreements will be made at the Government level.

3 3. Strategic location Geographically, Kazakhstan is located favorably for sales of products due to close vicinity of such markets as China, Russia, and has access to large ports in the world. The Republic of Kazakhstan is a member state of the Customs Union along with the Russian Federation and Belarus, which ensures free movement of goods between the Union countries, where the integrated customs area with internal market of approximately 165 mln. people will be created. Moreover, the unique geographical location of Kazakhstan makes it possible to reach a position of powerful global stakeholder in Asia and CIS region (Russia, Central Asia, China, Iran, India).

4. Strategic partnership • The United Chemical Company was established on 21 January 2009 to execute instructions of the President of the Republic of Kazakhstan in development of the chemical industry. • Its sole shareholder is the Government of the Republic of Kazakhstan via the “Samruk-Kazyna” Sovereign Wealth Fund. • One of the main objectives of the Partnership is to assist in development of the chemical industry of the Republic of Kazakhstan as a priority sector and increase its share in GDP. According to the government program on accelerated industrial and innovative development, placement of the chemical industry businesses with initial distribution is connected to sources of raw materials (Zhambyl, Aktobe, Atyrau and South Kazakhstan regions - nitrogen, phosphoric, potash, complex mineral fertilizers).

4 Kruglyi Lebyajenskoye

Inderskoye

Shugul

Infrastructure: • The salt-dome structures are located in the West Kazakhstan and Atyrau regions •Within a radius of 20 - 100 kilometers, there is Inderbor town and within a radius of 165 – 250 kilometers, there is Atyrau city; • in close vicinity to the district, there is the Ural River; • there is railway going to Atyrau port in the Caspian sea, to the Russian railways and to the south of Kazakhstan, further reaching Uzbekistan; • the district is electrified with the possibility of power supply expansion.

5 Summary Geological Description of the Fields

К О Geographical 2 Potash salt occurrence Field Knowledge Mineral resources compoun Resources Notes location depth ds Inderskoye(Belaya At 18 km to the Inclosing structure- Salts of mixed 26,98% Occurs at the depth of SRC as of 01.01.2009 Detailed

Rostosh) east from salt table of chloride-sulphate approx. 50-65 meters Category С2 – ore exploration

Inderborsky town Indersky structure composition 29517 thou. t, К2О - (saline dome). 7963 thou. t Kruglyi At 100 km to the Mineral resources Boron-potash salts 12-25% Lens-shaped masses, Approximate resources Preliminary north-west from masses were capacity -1-9m, of boron-potash ore - exploration Inderborsky town opened by 13 wells occurrence depth - 394- 187 mln.t, forecast protecting the (West Kazakhstan from 36. 562 meters. resources –more than resources of

Chapayev district) 300 mln.t. category С1. Lebyazhinckoye Extension of It was studied with Potash-potassic- Halogenic deposits were Approximate resources Preliminary “Kruglyi” dome the “Kruglyi” dome. magnesium salts opened at the depth of of potash-potassic- exploration structure and Studied by six wells 500 meters. magnesium salts protecting the separated from it (ore) - 220 mln.t, resources of

by small salt balk forecast resources- до category С1. at the dome part 300 mln.t

Shugul At 64 km to the Inclosing structure- Potash and boric 17-31% Saline deposits were К2О resources of Preliminary

east –north-east Shugul saline dome salts . opened at the depth of category С2 – 160 mln. exploration from Inderborsky Studied by 13 290 – 340 meters t, forecast resources– protecting the town (West wells. 150 mln.t resources of

Kazakhstan Tainak category С1. district )

6 Logistics

Possible versions of routes in priority ratin Possible logistical layouts and assessment of costs for delivery of cargos to the priority markets directions of export g

Up to western Up to Up to Central Europe ports of the Black Kazakhstan China Sea borders Atyrau– Aksaraiksaya – Krasnaya Mogila – Kiev –Varshava $65 $24 $45 Atyrau– Baku – Poti – Konstantsa

Warsaw Atyrau – Astrakhan– Volgo-Donskoi Kiev Canal– Rostov-on-Don– Konstantsa VolgogradMakat KrasnayaRostov-on Mogila-Don– КKaraganda Astrakhan Kyzylorda Dostyk Turkey Konstantsa Urumchi Poti Aktau Taraz Almaty Istanbul Baku Atyrau – Astrakhan– Volgo-Donskoi Ankara Bukhara Canal– Rostov-on-Don – Istanbul Bandar-Anzali Сарахс Tegeran Lanzhou Atyrau – Baku – Poti – Istanbul

Bandar-Abbas Atyrau– Tashkent – Bukhara –Sarakhs– Karachi Tegeran– Ankara Railway India Mumbai Atyrau – Tashkent – Bukhara – Navigable route Chardzhou– Sarakhs– Bandar-Abbas – Mumbai Priority markets Atyrau – Aktau – Bandar-Anzali – Bandar- $90 Abbas –Mumbai Price for transportation in the direction, US Dollars Atyrau – Aktau – Baku – Poti– Mumbai $90 for 1 ton of mineral fertilizers China Most favorable Ratings of favorable directions Atyrau– Dostyk– Urumchi – Lanzhou*

* there is only one route with acceptable cost value to China

7 Phosphorites and apatites of Kazakhstan Region The total amount of deposites (names) , appearances and promising fields

West Kazakhstan 35 (Shilisaiskoe, Alginskoe, Novoukrainskoe, Bogdanovskoe, Koktyubinskoe, Pokrovskoe, Hersonskaya,Rodnikovskaya, Belogorskaya, Kara-Hobdinskaya, Esetskaya, Shibaevskaya, Timreiskaya, Bogdanovskaya, Sary-Hobdinskaya, Verhneuilskaya, Pokrovskaya, Koktyubinskaya, Shilisaiskaya, Zhurunskaya, Shubarkudukskaya, Temirskaya, kenkiyakskaya, Embinskaya, Airakty, Sharkala,Tushibek, shetpe, Hangababa, Tyubidjik,Zhalbart, Tauchi, foothills of south Ural, Karatauchik)

North Kazakhstan 31 (Dubrovskoe, Krasnomaiskoe, Barchinskoe, Marievskaya, Dragomirovskaya, Chkalovskaya, Zharkentskaya, Dubrovskaya, Zlatogorskaya, Pavlovskaya, Kanarskoe, Ayatskoe, Lisakovskoe, Shielinskoe, Kirovskoe, Zhanaaulskaya, Mezhozernoe, Mailysorskoe, Myrzambetskoe, Celinnoe, Dombralinskoe, Aksuyskoe, Shelekskoe, Seletinskoe, Akzharskoe, Shulaksandykskoe, Koksengirskoe; Uranium- phosphorus: Koksorskoe,Tastykolskoe, Zaozernoe, Terekskoe,Kerbaiskoe)

Central Kazakhstan 12 (Nugurbekskoe, Sarysaiskoe, Basaltuyait, Mirnoe, Atansor, Zhamankolskoe, Ementau, Seletinskoe,Shulasandykskoe, Vladimirskaya, Ishimskaya, Alekseevskaya) South Kazakhstan 26 (Тamdy, Arbatas, Kotyebulak,Zhetimshoky, Chulaktau, Tesiktas, Chilibulak, Tiesai, Kyrshybakty, Aksai, Karashat, Akzhar, Ushbas, Koksu, Geres, Zhanatas, Gimmelfarbskoe, Zhilan, Kokdzhon, Kendyktas, Suukyubinskoe, Tekeliiskoe, Kazalinskoe, Syrdarinskoe, Chulaktauskoe, Mashatskoe)

East Kazakhstan 3 (Holzunskoe, Markakolskoe, Koitas) 8 Karatau phosphorite basin  Deposits with the largest reserves of phosphorite are mostly located in the Karatau phosphorite basin  Deposits are situated along the line with 120 km length  Width of the line is approximately 25-30 km  There are 46 phosphorite fields revealed, 15 of which are registered on the balance of state subsoil fund: Chulaktau, Tesiktas, Tiesai, Kyrshybakty, Aksai, Karashat, Akzhar, Ushbas, Koksu, Geres, Zhanatas, Gimmelfarbskoe, Zhilan, Kokdzhon, Kendyktas, Suukyubinskoe, Tekeliiskoe, Syrdarinskoe (South Kazakhstan)

9 Overview of Karatau phosphorite basin

 Explored reserves of phosporite ores that are on the balance is 4 billion. 279 millions tones with 1013,2 million tones of Р2О5 reserves  Phosphorite basin is piled with protezoic and paleozoic rocks  Total thickness of phosphorite beds varies from 0,5m to 35 m  Average concentration of phosphorus pentoxide in the balanced reserves is equal to 24,7%. (1,7-6,3 times higher than other CIS countries)  Phosphorites of Karatau are complicated in enrichment, ore dressing and refinery  The fields’ industrial ore pack thickness reaches 30 meters  All fields are spread on the flanks and are confined by discontinued breakings with significant displacements of separate blocks

10 UCC MASTER DEVELOPMENT PLAN

Oil Gas Salt: potassium, sodium, Sulphur phosphorous ore Oil & gas refinery products

Basic organics including polymers Basic inorganic including fertilizers

Bulk organic Chemical elements basic Polymers Fertilizers and their compounds chemicals (polyethylene, (phosphates, potash, (chlorine, phosphorus, (methanol, polypropylene) nitrogen, complex) etc) lubricants)

Inorganic High refined Nitrogen Alkali Synthetic acids low-tonnage compounds (caustic rubber in (sulfuric, organic (ammonia, soda, soda initial forms hydrochloric chemicals nitric acid) ash) )

Special and consumer chemicals

Industrial chemicals and products (pesticides, Detergents explosives, synthetic fibers, 11 paints, rubber, etc.) United Chemical Company LLP

UCC was established on 21st of January, 2009, in pursuance of the decree of the President of the Republic of Kazakhstan on development of the chemical industry

One of the main tasks of the UCC is to support the development of the chemical industry of the Republic of Kazakhstan and increase its share in Gross National Product

UCC is an operator of the Governmental Programme of forced industrial-innovative development of the chemical industry for 2010-2014

UCC activity is based on Master Development Plan made by NEXANT (UK)

12 UCC state industrial policy involvement

•adoption of the state policy to industrial Government of the development Republic of Kazakhstan •programme of forced industrial-innovative development •implementation control 100 %

•implementation of the state policy in a state assets Sovereign Welfare Fund management “Samruk-Kazyna” JSC •monitoring of subsidiary companies participating in implementation of the industrial policy

100 %

•implementation of the state policy in development UCC of the chemical industry

13 High-Priority Subsectors (NEXANT)

Oil Gas Salt: potassium, sodium, Sulphur phosphorous ore Oil & gas refinery products

Basic organics including polymers Basic inorganic including fertilizers

Inorganic High refined Nitrogen Alkali Synthetic acids low-tonnage compounds (caustic rubber in (sulfuric, organic (ammonia, soda, soda initial forms hydrochloric chemicals nitric acid) ash) )

Special and consumer chemicals

Industrial chemicals and products (pesticides, Detergents explosives, synthetic fibers, 14 paints, rubber, etc.) Map of investment projects

SEZ “Atyrau national industrial Special economic zone “Morport SEZ “Chemical park Taraz” petrochemical park” Aktau” • Construction of integrated petrochemical • complex in Atyrau region: Polymer production - I phase (polypropylene) - II phase (polyethylene) • Butadiene and polybutadiene rubber • Sodium cyanide production • Polymer production Stepnogorsk, Akmolinskaya region • Glyphosate production - BOPP film - polyethylene film - polypropylene bag • Sulfuric Acid Plant is under reconstruction with • Construction of ammonia-urea complex start-up in Q3 2013

15 Integrated Petrochemical Complex (Phase I)

Total Project Cost: USD 2 030 mln. Project Participants: UCC(51%), SAT&Co (49%) Location: Atyrau Region

Production Capacity: PP – 500 KTA

Start-up: 2014

Key project advantages

Location in Special Economic Zone in Atyrau Region near feedstock supplier gives fiscal benefits and incentives Best located to supply both European and Asian markets Competitive advantage via long-term access to low- cost raw materials Lummus Technologies – exclusive supplier of the technology, one of the leading companies in the market. The Project demonstrates strong economic efficiency

16 Integrated Petrochemical Complex (Phase II)

Total Project Cost: USD 4 148 mln. UCC(25%), LG Chem Ltd. (50%), Project Participants: Sat&Co (25%) Location: Atyrau Region

Production Capacity: PE – 800 KTA

Start-up: 2016

Key project advantages

Perspective participation opportunities FEED EPC/EPCM O&M Total Project Cost: USD 7 430 mln. Project Participants: TBD Location: Atyrau Region PE– 800 KTA MEG - 524 KTA PP– 568 KTA Production Capacity: Polyols– 200 KTA Benzene – 200 KTA Butadiene – 169 KTA Start-up: 2018

Key project advantages Location in Special Economic Zone provides fiscal benefits and incentives Advantageous location The Project demonstrates strong economic efficiency Competitive advantage via long-term access to low- cost raw materials 18 SEZ “Chemical park Taraz”

Perspective participation opportunities FEED (ISBL infrastructure) EPC (ISBL infrastructure)

Total Project Cost: USD 222,2 mln.

Project Participants: UCC (100%)

Location: Zhambyl Region 16 productions on release of the wide assortment of chemical Production Capacity: products, including the first stage of 4 production complexes Start-up: 2014

Key project advantages Government participation and support The combination of raw material supply The availability of industrial infrastructure Advanced railway terminal Proximity to the developed regions of country Project demonstrates strong economic efficiency 19 Butadiene and Polybutadiene Rubber Production P

Total Project Cost: USD 1 173 mln. Project Participants: TBD Location: Atyrau Region

Phase I - 229 KTA of butadiene Production Capacity: Phase II - 125 KTA of PBR

Start-up: 2017

Key project advantages

High prices and demand for butadiene due to С4 deficit worldwide. 15 percent annual growth for butadiene prices is forecasted for 2011-2017; Location in Special Economic Zone in Atyrau Region near feedstock supplier gives fiscal benefits and incentives. Butane dehydrogenation technology – is environmentally friendly proven and trusted manufacture technology. The Project demonstrates strong economic efficiency, especially with Synthetic rubber production .

20 Polymer Production

Total Project Cost: USD 84,9 mln.

Project Participants: UCC(90%), Propylene Pack LLP(10%)

Location: Atyrau Region

PE film – 4 125 KTA Production Capacity: BOPP film – 14 738 KTA PP bags – 48 mln per annum

Start-up: 2014

Key project advantages

Location in Special Economic Zone in Atyrau Region near feedstock supplier gives fiscal benefits and incentives Competitive advantage via long-term access to low- cost raw materials Proven and trusted manufacture technology Project demonstrates strong economic efficiency

21 Sulfuric Acid Plant

Total Project Cost: USD 74 mln.

Project Participants: UCC (56%), other partners (44%)

Location: Stepnogorsk

Production Capacity: 180 KTA11

Start-up: 2013

Key project advantages

Best located to supply both European and Asian markets Competitive advantage via long-term access to low- cost raw materials Feedstock availability Proven and trusted manufacture technology The Project demonstrates strong economic efficiency

22 Production of Yellow Phosphorus and Thermic Ortho-Phosphoric Acid

Perspective participation opportunities FEED EPC O&M Preliminary Project USD 43 mln. Cost: Project Participants: UCC(50%), RFS (50%) Location: South-Kazakhstan Region Yellow Phosphorus - 12 KTA Production Capacity: Ortho-Phosphoric Acid – 24 KTA Start-up: 2015

Key project advantages

Location in Industrial Zone with available infrastructure (tariffs for water and electricity is lower by 25% in Industrial zone) Available plant area – 10 ha (RFS) The proximity of major highways ("Western Europe - Western China") Availability of trade and logistics center in Shymkent A system of ecological safety 23 Sodium Cyanide Production

Total Project Cost: USD 126.5 mln. Project Participants: TBD Location: Zhambyl Region Production Capacity: 25 KTA Start-up: 2014

Key project advantages

Assessment of the overall needs of the market in Kazakhstan and Central Asia in 2015 was 34 000 tons per year, including Kazakhstan's share - about 60% (20- 22 thousand tons per year). Growth of demand for sodium cyanide is associated with plans to build facilities for the extraction of gold in Kazakhstan and the region. Currently, demand is covered entirely by imports Location in Special Economic Zone in Zhambyl Region near feedstock supplier gives fiscal benefits and incentives Proven and trusted manufacture technology Project demonstrates strong economic efficiency

24 Production of Glyphosate (Herbicide)

Total Project Cost: USD 264 mln.

Project Participants: UCC(99.9%), SK-Invest (0.1%)

Location: Zhambyl Region Glyphosate – 10 KTA (95% ) Caustic soda – 40 KTA Production Capacity: Phosphorus trichloride – 13.6 KTA Calcium Chloride – 30 KTA Start-up: 2015

Key project advantages

Government input in the form of infrastructure development Location in Special Economic Zone in Zhambyl Region near feedstock supplier gives fiscal benefits and incentives Competitive advantage via long-term access to low- cost raw materials Proven and trusted manufacture technology Project demonstrates strong economic efficiency 25 Спасибо за внимание! Республика Казахстан, г. Астана, 100008 пр. Республики, 34, офис № 245, 234, 233 тел.: 8 (7212) 56-56-56, 56-56-55 факс. 8 (7212) 56-56-54