Coal industry restructuring in

Prof. Dr. Franz-Josef Wodopia, Chief Executive, German Coal Association

German Coal Mining History

144.7 139.4 coal production in Mt saleable 135.1 workforce (in thousand) 117.4 585.2 112.0 577.5 531.9 110.8

377.0 86.6 81.7 264.0 66.1 244.4 53.2 178.8 4.,8 122.9 186.8 92.6 25.7 78.1 21.3 45.6 12.1 32.8 20.9 1949 1959 1969 1979 1989 1999 2009

driving re-construction after 1947 ECSC Treaty – Base of the EU coal crisis/RAG establishment 1969 future until 2018 source: RAG AG 1 Where did we start?

Establishment of Ruhrkohle AG in 1969: approx. 180,000 staff

mines coking plants

source: RAG AG, 2015 2 Where are we today?

2014: approx. 10,200 staff

Steinfurt Ibbenbueren County mine

Auguste Victoria mine

Prosper-Haniel mine

mines source: RAG AG, 2015 3 Employment effects of the German coal industry by region

thousand 100 additional workforce in mining-related jobs: 90 80 • outside the mining areas 70 60 • inside the mining areas 50 40 Ibbenbüren 30 Saar area 20 Ruhr area miners 10 0 miners total number of jobs created 2007 by the hard coal mining industry

GVSt 2008 4 Implications for the regions: Number of employees in the mining industry compared to total employment in the German Ruhr area

Hamminkeln Haltern

Xanten Oer- Selm Marl Erken- Datteln Werne Sons- Hamm Hünxe schwick beck Berg- Alpen Bottrop Herten Reckling- Waltrop Lünen kamen Dins- hausen Bönen Glad- Castrop- Rhein- laken Gelsen- Kamen beck Rauxel berg Ober- kirchen Kamp- hausen Herne Unna Lintfort Dortmund Holz- Neu- Frönden- Bochum wickede kirchen- berg Vluyn Essen Mülheim Schwerte

Ennepe- Current rate of unemployment Ruhr-Kreis Hagen (February 2015) - Ruhr area: 11.2% (between 7.3% and 13.9%) - Germany: 6.9%

up to 0.1% up to 1.0% up to 2.0%

up to 3.0% up to 4.0% up to 5.0% above 5.0%

source: Prognos, 2007 5 Our shareholder: the RAG Foundation

Tasks of the RAG Foundation

■ Socially acceptable adaptation of the coal mining industry until the end of 2018

■ Floating of EVONIK Industries AG on the capital market ~ 68% 100%

■ Funding of the industry‘s perpetual responsibilities from 2019 onwards

■ Supporting education, science and culture in the mining regions

source: RAG AG, 2014 6 Approved state aid to facilitate the closure of uncompetitive coal mines according to the German closure plan

Article 3*: Closure aid (current production) million € Article 4*: Aid to cover exceptional costs (not related to current production!) 2500 Art. 3 Art. 4

2000 37%

1500 48% 54%

1000 74%

500

100%

0 2011 2012 2013 2014 2015 2016 2017 2018 2019 **

* Council Decision 2010/787/EU ** From 2019 onwards depreciations from the closure of the last mines and further costs of production units which have closed shall be distributed over several years. Therefore this figure is only an estimate of the necessary Art. 4 aid in this year. 7 Measures for socially acceptable workforce adaptation

■ For socially acceptable workforce adaptation, a comprehensive package of instruments is available.

■ It includes:

■ statutory regulations,

■ collective bargaining regulations,

■ internal company programmes.

8 Age structure of the workforce in the German coal mining industry

1970 1975 1980 1985 1990 1995 2000 2005 2010 2014

up to 19 20-24 25-29 30-39 40-49 50-54 55 and older 9 What we do

Strategy 2020 – More than just early retirement …

labour-to-labour transfers early retirement (StaffDevelopmentCenter)

qualification/retraining special mining-specific on-the-job qualification early retirement regulations

direct redeployment

in-house redeployment

temporary placement

redundancy payments

source: RAG AG, 2015 10 Which path do we follow?

socially acceptable workforce reduction 1997 - 2014

+ 9,390

81,000

40,880

26,560 2,210 10,190 10,550 YE 1996 - 70,810 YE 2014

source: RAG AG, 2015 11 RAG: staff transfers 2012 to 2018

Ibbenbueren region

Ibbenbueren mine

620

400 Auguste Victoria mine 960

840 Prosper-Haniel mine West Service div. mine 50 2012 790 (closure 2013 1,340 31.12.2012) 2014 160 Saar Ruhr region 2015 90 mine 2016 400 (closure 2017 350 30.06.2012) 260 2018 - Saarland ∑ 3,130

source: RAG AG, as of 7/2012 GVSt 7/2012 12 early-retirement scheme of RAG

age year of birth 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63

under- 1959-1963 adaption payment* transition payment** retirement pension ground mining 1964 - 1972 adaption payment* transition payment** retirement pension

1952-1963 adaption payment* retirement pension surface 1964 adaption payment* ret. pension

* paid by the Federal Office for Economic Affairs and Export Control ("Anpassungsgeld") ** paid by the miners' pension insurance ("Knappschaftsausgleichsleistung")

source: RAG AG, 2011 13 Instruments for socially responsible workforce reduction

Some 900 former miners now work in the "white sector“.

Some 100 former miners now work at Dortmund Airport.

source: RAG AG 14