Raspadskaya announces its medium-term programme of production development for 2011-2015

In mid December 2010, the Company commenced the first face after the accident at Raspadskaya
Mine.
In 2011, it is planned to put another four faces into operation at Raspadskaya Mine:
- in 2Q2011 – the first face;
- in 3Q2011 – the second face;
- in 4Q2011 – the third and fourth faces.
In 2011, total production volume of coking coal from Raspadskaya Mine will amount to 2.5 mt.
In terms of production volume at Raspadskaya Mine for the nearest period the Company used a more conservative scenario compared to the production potential of the Mine.
In 2011, production of coking coal from other Company’s enterprises is based on growth of production volume at Raspadsky Open Pit by 74% YoY to 3.0 mt of coking coal and at the hard coking coal mine
Raspadskaya-Koksovaya by 139% YoY to 1.0 mt of coking coal.
In 2012, total production volume growth will be supported by the increase of production at Raspadsky Open Pit by 17% YoY to 3.5 mt of coking coal and at Raspadskaya Mine by 140% YoY to 6.0 mt of coking coal.
In 2013, the Company plans to reach a new production level of 15.0 mt of coking coal that exceeds 2007 level (13.6 mt) by 10% and 2012 level (12.8 mt) by 17%.
In 2014 and 2015 expected total production volume of coking coal amounts to 16.8 mt and 18.5 mt, respectively.
According to the international mining and geological requirements and the programme on replenishment of coal reserves the Company maintains its 20-year programme of subsoil use
constantly updated.
In 2010-2015, capital investments in new construction and production development will be directed to purchase of new equipment and drifting of mine workings at the Company’s mining enterprises.
Capital investments in new construction and production development made in 2010-2013 will enable the Company to develop organically and reach production level of 18.5 mt of coking coal in 2015.
Sales policy and export opportunities:
After the accident at Raspadskaya Mine in May 2010 the Company temporarily suspended its export sales and focused on domestic sales only – currently Raspadskaya supplies eight Russian metallurgical and coke plants.
In 2011, the Company is able to resume its sales to the export markets that since 2009 began to focus on increasing consumption of Russian coking coal.
As part of the strategic programme to increase sales volume, diversify client base and sales markets the Company is able to present on markets of Russia, Asia (South Korea, China, Japan), Ukraine and Eastern Europe.
Main directions and customers for the Company’s exports will be determined on the basis of changing external conditions – terms of delivery, price level, supply volume, system of premiums and discounts, possibilities of use of port facilities and capacity of border-crossings and railways.
Given an established logistics for coal production exports to the Asian countries the Company in the medium-term plans to export not less than 35% of total sales volume of coal production.
Gennady Kozovoy, Raspadskaya’s CEO, commented:
“Over the past five years the Company was developing under the influence of external factors such as demand for coking coal, financial crisis, industrial production slowdown, export opportunities of Russian producers and other. At the same time we were constructing new production sites, purchasing new licenses for coal reserves, optimized corporate financing and conditions for business. In perspective, the existing mining and geological conditions, production investments, professional skills of the personnel enable the Company to implement growth strategy and reach new coking coal production levels of 16.8 mt in 2014 and 18.5 mt in 2015. As of today Raspadskaya has signed a contract with the international company to evaluate its coal
resources under international standards and confirm Company’s production development plans. The evaluation report will be publicly available in April 2011 together with the disclosure of IFRS financial results for 2010”.