OJSC “Kuzbasskaya Toplivnaya Company” increased total coal production volume by 11%

In 2010 the volume of coal sorted by coal-crushing and screening units increased by 33% year-on-year to 4.10 mln. tonnes (2009: 3.08 mln. tonnes). In August 2010 the Company launched its first coal enrichment plant “Kaskad” and started to produce enriched coal by processing high-ash coal and diluted raw coal, which had previously been dumped as waste. From September to December 2010 the plant has produced 200 thousand tonnes of export quality coal. All this resulted in increasing the share of coal processing products from 50% in 2009 to 63% of total Company production volume in 2010.
During the year coal sales volume increased by 15% year-on-year and reached 8.54 mln. tonnes (2009: 7.41 mln. tonnes). The pick-up of sales was driven by export volumes, which increased by 39% year-on-year to 3.75 mln. tonnes (2009: 2.69 mln. tonnes). The share of export sales increased from 36% in 2009 to 44% in 2010. The domestic sales volume remained virtually stable at the level of 4.79 mln. t. (2009: 4.71 mln. t.), but its structure changed in favour of resale of coal, purchased from third-parties, which reached 25% (2009: 19%).
 Following the results of 2010 the Company’s largest export markets remained the same with Poland (46% of export volume), China and South Korea (together - 43%). During the year KTK has been actively expanding its client base in countries, located in Eastern and Southern Europe – coal has been shipped to Ukraine (4% of export volume), Czech Republic (3%), Turkey (2%), Spain (1%) and Greece (1%).
During 2010 the average price of coal increased by 10% year-on-year to RUR 977 per tonne net of VAT and railroad tariffs (2009: RUR 892 per tonne). The average export price reached RUR 1,021 per tonne, exceeding 2009 price by 5% (RUR 970 per tonne). The average domestic price increased by 11% year-on-year from RUR 848 to RUR 943 per tonne. The higher growth of domestic price compared to the export one is related to the base effect: in early 2009 the Company sold export coal under contracts negotiated with record high prices of 2008, and in early 2010 coal has been sold by the prices of 2009, affected by the crisis. Nevertheless, during the year the general average price has been increasing from quarter to quarter affected by recovery of global coal demand and concluding of contracts at a higher prices.