About company

Kuzbasskaya Toplivnaya Company (KTK) is one of the fastest-growing thermal coal producers in Russia. In terms of 2009 production volume, it was ranked 7th among the largest thermal coal producers in the country. In the ten years since its establishment in 2000, the Company has commissioned and launched three open-pit mines, located in the Kuzbass area, Russia’s largest coal producing region. In 2009 KTK annual production volume achieved 6.15 million tonnes of high quality thermal coal.

According to IMC, the Company’s JORC coal resources totaled 409.3 million tonnes of ROM coal as of January 1, 2010 and proven and probable reserves amounted to 191.6 million tonnes of ROM coal, recoverable during the period of 2010-2029. The Company produces coal with a naturally low sulphur and phosphorus content, as well as a relatively high calorific value.

The Company’s mining operations are supported by an extensive production and logistics infrastructure, including its own railway network and facilities, which enable the Company to transport 100% of produced coal from the open-pit mines to the main railway hub at the long-distance railway network, operated by the Russian Railways. Furthermore, as the Company’s mines are compactly located within 5 km from each other, a number of operations are conducted centrally, thereby minimizing overhead costs and expenses.

In 2009, the Company’s total coal sales amounted to 7.4 million tonnes of coal, of which 6.0 million tonnes were extracted by the Company and 1.4 million tonnes were retailed after purchasing from other coal producers. The Company maintains a diversified sales structure balanced between export and domestic sales with approximately 64% of the coal sold to domestic consumers and approximately 36% exported, primarily to Poland, South Korea and China, in 2009.

The Company’s strong regional presence is supported by an extensive retail distribution network, located throughout the Kemerovo, Novosibirsk, Omsk and Altay regions of Western Siberia. As of 31 December 2009, the Company’s distribution network included 60 owned and operated points of sale and delivered 2.8 million tonnes of coal in 2009, positioning KTK as one of the principal suppliers of coal to retail customers in Western Siberia.

The Company expects to continue to grow its production volume, in particular, following the launch of the Cheremshansky mine in 2008 and ongoing investments into its high performance modern mining technology, aimed at achieving the aggregate structural capacity of existing mines of 11 million tonnes of coal per year.