OJSC “Kuzbasskaya Toplivnaya Company” (hereinafter “КТК”) has won the auction for the right to use subsoil for the purposes of exploration and development of mineral coal on the “Bryansk 1” site of the Karakan coal deposits situated on the territory of Prokopievsk and Belovskiy municipal districts of Kemerovskaya Oblast.
Within the borders of the licensed area, the mineral coal deposits amount to approximately 250,2 ml tones according to the C2 category. The single payment totals to 188 100 000 rubles.
«The plans of OJSC "Kuzbasskaya Toplivnaya Company" in 2012 are to start geological prospecting work in the "Bryansky" deposit to start on its base developing the fourth open-pit mine of the company.
Expansion of deposits is our strategic goal, which we gradually realize and which will allow further expansion of the company and boost its significance on the mineral coal world market” - The general director of the OJSC “Kuzbasskaya Toplivnaya Company” commented on the event.
For more information please contact:
OJSC "Kuzbasskaya Toplivnaya Company" (Kemerovo)
Head of public affars department
+7 384 236 47 62
Notes to editors:
OJSC Kuzbasskaya Toplivnaya Company (“KTK” or the “Company”) is one of the fastest-growing thermal coal producers in Russia. In terms of 2010 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 and an enrichment plant, achieving annual production volume of 6.8 million tonnes of coal in 2010. 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 capacity1 of existing mines of 11 million tonnes of coal per year.
The Company’s JORC coal resources totalled 402 million tonnes of ROM coal as of January 1, 2011 and proven and probable reserves amounted to 185 million tonnes of ROM coal, recoverable during the period of 2011-2030. The Company produces exclusively thermal coal, classified as grade “D” under the Russian classification system, with a naturally low sulphur and phosphorus content, as well as a relatively high calorific value.
The Company conducts mining operations at three open-pit mines, located in the Kuzbass area, Russia’s largest coal producing region. 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 located within 5 km from each other, a number of operations are centralized, thereby minimising overhead costs and expenses. In 2010, the Company’s total coal sales amounted to 8.5 million tonnes of coal, of which 6.4 million tonnes were produced by the Company and 2.1 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 56% of the coal sold to domestic consumers and approximately 44% exported, primarily to Poland, South Korea and China, in 2010.
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 01 January 2011, the Company’s distribution network included 65 owned and operated points of sale and delivered 3.3 million tonnes of coal in 2010, positioning KTK as one of the principal suppliers of coal to retail customers in Western Siberia.
Consolidated IFRS 2010 Financial Highlights
1 The maximum production capacity that the Company believes could be achieved (taking into account projected stoppages for planned repair and maintenance) in an annual period if the Company were able to process all the coal that could be mined using the Company’s existing mine facilities after acquisition of certain mining equipment and construction of three processing/enrichment facilities in accordance with its current capital expenditure program.
2 EBITDA for each period is defined as results from operating activities, adjusted for amortization and depreciation, impairment loss and loss on disposal of property, plant and equipment. EBITDA is not a measurement of the Company’s operating performance under IFRS and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with IFRS or as an alternative to cash flow from operating activities or as a measure of the Company’s liquidity.