Kemerovo, Russian Federation – OJSC “Kuzbasskaya Toplivnaya Company” (“Company” or “КТК”, (RTS/MICEX: “KBTK”), one of the fastest-growing thermal coal producers in Russia, is pleased to announce today the opening of the new mobile complex on manufacture of explosives.The complex on manufacturing emulsion explosives by capacity 50 thousand tons a year and cost of 120 million RUR has been started at the Vinogradovsky open-pit mine.
This complex will product the explosives for requirements of the enterprises OJSC “Kuzbasskaya Toplivnaya Company”.
Building, service and complex operation carries out JSC “Nitro Siberia-Kuzbas”.
JSC “Nitro Siberia-Kuzbas” is the supplier of production and services more than on 20 mining enterprises of the Kemerovo and Novosibirsk areas, its basic consumers are the largest coal companies of region.
The company has a wide experience in creation of similar mobile complexes in territory of Kuzbas and all country.
Practice of creation of mobile complexes has well proved at manufacturing enterprises of Russia. Complex presence in territory gives to the coal enterprise a number of advantages, it: the mobility, the raised safety and ecological compatibility.
Commenting on the opening of the complex on manufacturing emulsion explosives, Igor Mikheyev, the director of the Vinogradovsky open-pit mine said: «Complex creation will help the enterprises “Kuzbasskaya Toplivnaya Company” in due time to have the guaranteed volume of explosive that simplifies technological process, does its stable, more safe and reliable».
Company Overview
OJSC Kuzbasskaya Toplivnaya Company (“KTK” or the “Company”) 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, achieving annual production volume of 6.15 million tonnes of coal in 2009. 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.
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 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 compactly located within 5 km from each other, a number of operations are conducted centrally, thereby minimising 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.
FY 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 amortisation 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.
