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Company Presentation: OKD, a. s.

Lazy. Paskov. ČSA. Č SM. Darkov. Company Presentation: OKD, a. s. Klaus-Dieter Beck. III. Energy Forum, Prague. 23 rd October 2008. 1. Key Information OKD (Ostravsko karvinské doly) is one of the few successful operating bituminous coal mining companies in Europe.

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Company Presentation: OKD, a. s.

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  1. Lazy Paskov ČSA ČSM Darkov Company Presentation: OKD, a. s. Klaus-Dieter Beck III. Energy Forum, Prague 23rd October 2008 1

  2. Key Information • OKD (Ostravsko karvinské doly) is one of the few successful operating bituminous coal mining companies in Europe. • 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. 2

  3. 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 3

  4. Currently operating Development project 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 ŠvermaCokeplant CSA Karvina Mine Debiensko SvobodaCokePlant Lazy Paskov Mine ČSM MINE Frenštát Mine Mothballed 4

  5. Coal Reservesof OKD 5

  6. 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 6

  7. OKD’s Investment Program Investment program comprises four areas: Mining equipment renewal, Personal equipment modernization, Mine infrastructure improvements, Coal reserves extension at existing operations. 7

  8. OKD’s Investment Program 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. 8

  9. OKD’s Investment Program 2. Miners equipment modernization About CZK 500 millionwill 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). 9

  10. OKD’s Investment Program Mine infrastructure improvements of CZK 1.5 billion will be spent until 2010 for: • Air-conditioning • Miners transportation features • Prep plant updates Coal reserve extension is planned at existing operations of CZK12.3 billion until 2020 by: • Sinking shafts deeper • Developing new floor levels 10

  11. Economicaland Social Benefits Tax contribution Annually OKD pays approximately CZK 4.5 billionon 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. Education The company offers scholarships for certain disciplines at secondary schools and universities. The previously abandoned mining apprenticeship program has been re-activated. 11

  12. Reclamation Activities and Legal Framework of Mining Industry Reclamation 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 inspectedby 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 miningpermission. 12

  13. Corporate Social Responsibility OKD Foundation A Foundation was created January 25th 2008; OKD’s annually contributionis 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 allocatedin fall. Sponsoring 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. 13

  14. Summary • 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” 14

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