CORPORATE NEWS AGENCY Interfax - CNA RUSSIA’S COAL INDUSTRY 2 Pervaya Tverskaya- Yamskaya IN 2014 Moscow, 127006, Russia Tel. (7-499) 250-2922 [email protected] March 2015 TABLE OF CONTENTS RUSSIA’S COAL INDUSTRY: MAJOR TRENDS ........................................... 4 Russia’s coal consumption ................................................................................. 4 Russia’s coal reserves ........................................................................................ 5 Russia’s coal industry: recent trends .................................................................. 7 Growth trends .............................................................................................................. 7 Regional production trends ......................................................................................... 10 Major coal projects .......................................................................................... 11 Russian coal industry: transportation issues...................................................... 15 Railroad transportation ............................................................................................... 15 Seaport facilities ......................................................................................................... 17 Prices for coal: trends in domestic and world markets ...................................... 18 Russian coal industry: foreign trade performance ............................................. 19 RUSSIAN COAL INDUSTRY: TOP COMPANIES, GROUPS, HOLDINGS .. 20 TOP RUSSIAN COAL PRODUCERS ............................................................. 22 Siberian Coal Energy Company (SUEK).......................................................... 22 SURVEY Structure .................................................................................................................... 22 Operations summary ................................................................................................... 23 Kuzbassrazrezugol ........................................................................................... 27 Structure .................................................................................................................... 27 Operations summary ................................................................................................... 27 SBU-Coal ........................................................................................................ 30 Structure .................................................................................................................... 30 Operations summary ................................................................................................... 31 Mechel (Yuzhny Kuzbass, Yakutugol) ............................................................. 33 Structure .................................................................................................................... 33 Operations summary ................................................................................................... 34 En+ Coal ......................................................................................................... 37 Structure .................................................................................................................... 37 Operations summary ................................................................................................... 38 Sibuglemet ...................................................................................................... 41 Structure .................................................................................................................... 41 Operations summary ................................................................................................... 41 Evraz Group .................................................................................................... 44 Structure .................................................................................................................... 44 Operations summary ................................................................................................... 45 Severstal (Vorkutaugol, Vorgashorskaya) ........................................................ 49 Structure .................................................................................................................... 49 MARKET Operations summary ................................................................................................... 50 Russia’s Coal Industry in 2014 Russian Coal ................................................................................................... 52 Structure .................................................................................................................... 52 Operations summary ................................................................................................... 52 Kuzbass Fuel Company ................................................................................... 55 Structure .................................................................................................................... 55 Operations summary ................................................................................................... 55 Stroyservis....................................................................................................... 58 Structure .................................................................................................................... 58 Operations summary ................................................................................................... 58 MMK Coal Division (Belon) ........................................................................... 60 Structure .................................................................................................................... 60 Operations summary ................................................................................................... 61 LIST OF TABLES Table 1 Russian Coal Reserves, million tons .............................................................................................. 6 Table 2 Russian Coal Production by Main Types in 2010-2014, million tons .............................................. 7 Table 3 Average Monthly Growth in Output by Types of Coal in Russia in 2014 ....................................... 8 Table 4 Compound Annual Growth Rates (CAGR) of Rail Tariffs and Prices for Coal In Russia in 2008- 2014 ................................................................................................................................................. 16 Table 5 Russia's Exports of Bitumen Coal in 2009-2014, '000 tons ........................................................... 19 Table 6 Russia's Imports of Bitumen Coal in 2009-2014, '000 tons ........................................................... 19 Table 7 Top Russian Top Coal Producers in 2014, mln tons ..................................................................... 20 Table 8 Major Coal Holdings and Groups in Russian Coal Industry .......................................................... 21 Table 9 SUEK’s Key Consolidated Financials to IFRS in H1 2014, US$ mln ........................................ 24 Table 10 SUEK’s Key Consolidated Financials to IFRS in 2012-2013, US$ mln ................................... 24 Table 11 SUEK-Kuzbass Key Financials to RAS in 2013-2014, US$ mln ............................................. 24 Table 12 SUEK-Krasnoyarsk’s Key Financials to RAS in 2013-2014, US$ mln .................................... 25 Table 13 Kuzbassrazrezugol’s Key Financials to RAS in 2012-2013, US$ mln ...................................... 28 Table 14 SBU-Coal Financials to RAS Consolidated by Key Companies in 2012-2013, US$ mln .......... 31 Table 15 Southern Kuzbass Key Financials to RAS in Jan.-Sept. 2014, US$ mln..................................... 35 Table 16 Yakutugol’s Key Financials to RAS in 2012-2013, US$ mln.................................................... 35 Table 17 Production and Sales Volumes of Mechel Steel Group in Jan.-Sept. 2014, '000 tons ................... 35 Table 18 Sibuglemet Key Non-Consolidated Financials to RAS in 2012-2013, US$ mln ........................ 42 Table 19 Mezhdurechye’s Key Financials to RAS in 2012-2013, US$ mln ............................................. 42 Table 20 Sibuglemet’s Financials to RAS Consolidated by Key Companies in 2012-2013, US$ mln ....... 43 Table 21 Evraz Group Coal Production 2013-2014, ‘000 tons ................................................................ 47 Table 22 Yuzhkuzbassugol’s Key Financials to RAS in 2012-2013, US$ mln......................................... 47 Table 23 Raspadskaya Key Financials to IFRS in H1 2014, US$ mln ..................................................... 47 Table 24 Severstal Resources Coal Sales Volume in 2013-2014, tons ..................................................... 50 Table 25 Vorkutaugol’s Key Financials to RAS in 2012-2013, US$ mln ............................................... 51 Table 26 Russian Coal’s Key Non-Consolidated Financials to RAS in 2012-2013, US$ mln ................. 53 Table 27 Russian Coal’s Financials to RAS Consolidated by Key Companies in 2012-2013, US$ mln ... 54 Table 28 Kuzbass Fuel Company’s Key Financials to IFRS in H1 2014, US$ mln .................................. 56 Table 29 Kuzbass Fuel Company’s Key Financials to IFRS in H1 2013, US$ mln .................................