About SUEK AG

SUEK AG was established in December 2004 as an exclusive exporting company of Open Joint Stock Company "Siberian Coal Energy Company" (OJSC "SUEK"), the largest Russian coal producer.

We are the biggest supplier of Russian coal to the international market. SUEK AG delivers coal to more than 30 countries all over the world. Our preferred goal is to develop direct relationships with consumers of coal. Thereat, more than 70% of our sales are made directly to the end-users.

Principally, the origin of coal we deliver is Kuzbass region (Russia), however, several production units in Khakassia, Buryatia and Khabarovsk region, all of which are in Russia, contribute to the total export of coal as well.

Referring to the figures, about 29.3 mio mt were sold in 2009 (including traded tonnage) and the outcome of 2010 was about 27.6 mio mt. Our expectation for 2011 are about 30 mio mt.

As mentioned above, in addition to sale of Russian coal, which is produced by the enterprises operated by OJSC "SUEK”", we are effecively engaged in trade of coal produced by other Russian coal producers and coal of non-Russian origin. Traded volumes are growing steadily, and in 2010 about 1.4 mio mt of non-Russian coal and about 0.4 mio mt of coal of other Russian producers were traded. SUEK AG has in its coal portfolio Indonesian, Australian and Colombian coal.

We arrange deliveries both by sea and rail, mainly on the basis of the following terms:

FOB - loading port;
FOB - barge ARA;
CIF/CFR - discharging port;
DES/DAP - discharging port;
DAF/DAP - cross border station.

Moreover, SUEK AG is the biggest charterer among Russia-originated suppliers of coal. We chartered about 17.8 mio mt in 2009 and about 15.5 mio mt in 2010. Our major geographical area in charterring is the Atlantic region where SUEK AG provides for more that 90% of all its seaborne sales on CIF and DES/DAP terms.

The implementation of price risk management allows SUEK AG to manage its exposure on coal and freight markets and optimize its growing portfolio. Having about 30 counterparties, SUEK AG is trading about 10 mio tons of coal and 350 days of freight on derivatives market annually. Further development of the derivatives market appears to be inevitable for coal trading and it is our intention to follow new demands accordingly.

Besides high quality of coal which is a must in our business, whether physical sales or paper trading, we adhere to the following principles:

direct relationships with consumers;
long-term cooperation;
individual approach to consumers’ needs;
high level of service and reliability.