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Company Presentation: OKD, a. s.
Jméno Příjmení | 5.10.2011 | Místo
Klaus-Dieter Beck     III. Energy Forum, Prague   23rd October 2008

                   Key Information

OKD (Ostravsko karvinské doly) is one of the few
successful operating bituminous coal mining companies in
5 active mines are operating in the Ostrava-Karvina region.
JORC compliant reserves (international standard) of hard
coal are about 230 million tons.
Coal sales in 2007: 13.1 million tons of coal
   EBITDA in 2007 was 9.1 billion CZK (~ 330 million €)
   Net profit in 2007 was 6.0 billion CZK (~ 220 million €)
Key customers are large steel and electricity companies.
OKD employs about 19,000 people.

                   Brief history
18th century - beginnings of coal mining in the region
Prior 1946 - coal mining business in the Ostrava
Karvina region was under control of several
companies, including the Rothschield family
1946 - nationalization of the hard coal industry
1989 – privatization and restructuring of mine
activities and closing down of 14 mines
2004/2005 – majority share of OKD acquired by RPG
Industries SE
2008 – IPO (36.5% of the company) at stock
exchanges in Prague, Warsaw and London

           OKD within the NWR structure

                             New World Resources N.V.

          OKD, a.s.              KARBONIA PL Sp. z o.o.         OKD, OKK, a.s.

          DARKOV MINE                 Morcinek               ŠVERMA COKE PLANT

     KARVINA          CSA
                                     Debiensko              SVOBODA COKE PLANT
      MINE            LAZY

          PASKOV MINE

            ČSM MINE

         Frenštát Mine

    Currently operating            Mothballed             Development project

                                          Coal Reserves of OKD

                                       CZECH (upper silesian basin)                        POLAND
                                 Resources and reserves (kt) Reserves (kt) Resources and reserves (kt) Reserves (kt)
                                    Geological          Tech. Mineable                JORC             Geological           Tech. Mineable             In mine plans
Active mines in Total               2,180,833              541,694                 229,094                                   12,113,000                 6,012,538
Frenstat                            1,526,075              359,000                    0
Closed mines in Total               1,084,131                 0                       0                                       626,224
Deposits in Total                  13,446,542             7,927,942                   0                                      27,404,483
Total                              18,237,581             8,828,636                229,094           113,000,000             40,143,707                 6,012,538
percentage of reserves in mine plans out of technical minable reserves:              3%                                                                    15%
                                                           Czech part:                                                        Polish part:
                                Geological:Thickness: 40 to 60 cm; level: -1,000 to -1,400 m
                                Tech. Mineable:Thickness: 80 to 140 cm; level: -1,000 to -1,400 m   Tech. mineable:Thickness: 100 cm, level: - 750 m

                The Importance of Coal
Coal is an essential raw material for a number of industries:
Generation of electricity
   25% of primary energy is produced from coal
   nearly 60% of electricity is produced from coal (lignite and
    bituminous) in CZ
Production of steel,
   66% of global steel production is dependent on coke.
Manufacturing process in the paper, cement, aluminium,
chemical and pharmaceutical industries

        OKD’s Investment Program
 Investment program comprises four areas:

1. Mining equipment renewal,
2. Personal equipment modernization,
3. Mine infrastructure improvements,
4. Coal reserves extension at existing

             OKD’s Investment Program
1. Mining equipment renewal
An initiative was launched in 2007 (POP 2010 – Productivity
Optimization Program until 2010) to purchase new equipment sets
worth CZK 8.5 billion in 2008 and 2009 for coal production and
mine development activities.

             OKD’s Investment Program
2. Miners equipment modernization
About CZK 500 million will be spent to purchase new protective
equipment for employees (clothing with reflecting stripes, water
resistant boots, high capacity lamps, gas detecting devices, lighter
self rescue filters etc).

            OKD’s Investment Program

3. Mine infrastructure improvements of CZK 1.5
   billion will be spent until 2010 for:
       Air-conditioning
       Miners transportation features
       Prep plant updates

4. Coal reserve extension is planned at existing
   operations of CZK12.3 billion until 2020 by:
       Sinking shafts deeper
       Developing new floor levels

         Economical and Social Benefits
Tax contribution
 Annually OKD pays approximately CZK 4.5 billion on taxes,
 social security and for health insurance.
OKD employees are paying CZK 2 billion per year for income
 taxes and health insurance.

Outside employment
OKD and OKK provide purchase orders and service contracts
 in an amount of CZK 5.5 billion per year.

The company offers scholarships for certain disciplines at
 secondary schools and universities.
The previously abandoned mining apprenticeship program has
 been re-activated.

             Reclamation Activities and
         Legal Framework of Mining Industry
CZK 7.7 billion has been spent on reclamation jobs
 on previous mining areas (1991-2006).
A total of 58 reclamation projects are currently being
 carried out on an area of 600 ha.

                             Current legal framework
Permits for mining activities are strictly restricted and
 inspected by Government authorities.
About 50 proceedings for mining permissions per year
 are currently being submitted.
Two E.I.A (Environmental Impact Assessment)
  proceedings were undertaken since 1998 for each mine.
Hundreds of participants to these proceedings were
  involved for each mining permission.

Corporate Social Responsibility
                               OKD Foundation
A Foundation was created January 25th 2008; OKD’s annually
 contribution is 1% of pre-tax profits.
Four programs are set up: for health, enjoyment, education
 and for European development projects.
A total of CZK 31.3 million was allocated to 180 projects in
 spring and about the same amount will be allocated in fall.
In addition to the OKD Foundation there is an
 additional annual sponsoring budget of over
 CZK 35 million for key areas as culture events and
 sport activities.

OKD has demonstrated in the recent past, continues
demonstrating it nowadays and - I am confident to say this-
will also demonstrate in the future that coal mining under
difficult geological conditions can be done successfully
even in Europe.
OKD resumes commitment to all key stakeholders:
    Employees in the field of work safety;
    Community to build a mutually beneficial relationship;
    Environment to minimize the impacts of mining activities;
    Shareholders to create optimum value.
 “There is plenty of bituminous coal left in the ground in
 the Czech Republic. OKD is committed to mine it for the
        benefits of the citizen of the Czech Republic”


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