DTEK increased coal production by 1.7% to 10.4 million tons in 1Q 2014

Main factors influencing the production performance: DTEK’s coal supplies to external markets went up by 68.1% or 477,100 tons; Coal production at the Obukhovskaya Mine (Russia) grew by 77.3% or 191,400 tons;  Ukraine’s TPPs and CHPPs reduced electricity generation by 6.2% or 1.4 billion kWh YoY.

DTEK allocated UAH 270.8 million to purchase equipment for breakage faces in 1Q 2014; investments in the replenishment of tunnelling equipment and upgrading the transportation chain exceeded UAH 75 million. The Company has been consistently implementing modern equipment and advanced methods to improve the working conditions of miners and enhance the efficiency of underground operations. The average annual labour productivity at DTEK’s mines is four times higher than the average productivity at state-run mines.

Key projects in progress in the reporting period:

· work to increase the hoisting capacity of the winder set at the Geroiv Kosmosu mine (total project budget: UAH 153.5 million) to three million tons per year starting from 2015;

· the replacement of the main fan at the Komsomolets Donbassa mine (total project budget: UAH 63.8 million); the construction of fresh air shafts at the Vakhrusheva mine and Frunze mine (total project budgets: UAH 127.7 million and UAH 214.7 million, respectively); the construction of return air shafts at the Yuvileina mine and Dobropilska mine (total project budgets: UAH 235 million and UAH 70 million, respectively). The implementation of these projects will enhance the safety of miners’ work and secure current coal output with sufficient air supply to the mines;

· technical re-equipment of section 2 at the Pavlogradska coal processing plant (total project budget: UAH 133.8 million). The project is aimed at increasing the plant’s capacity for processing of run-of-mine coal, which will reduce costs for processing by external processing plants and streamline the „mine-coal processing plant-thermal power plant” logistic chain.