KTK is one of the fastest?growing thermal coal producers in Russia. It is the sixth largest thermal coal producer in the country based on 2012 production volumes. In the 13 years since its establishment, the company has commissioned and launched three open?pit mines and two washing plants, achieving an annual production volume of 8.71 mln tonnes of coal in 2012. Its JORC coal resources totaled 391 mln tonnes of raw thermal coal as of January 1, 2013, and proven and probable reserves amounted to 174 mln tonnes, recoverable during the period of 2013?30. In December 2011, KTK won an auction for the right to use the subsurface of the Bryansky coal deposit, which holds reserves of 250 mln tonnes of coal in the C2 category. The surface mine is located in proximity to existing infrastructure and production assets.
KTK produces thermal coal exclusively, classified as grade D under the Russian classification system, with naturally low sulfur 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.
KTK’s mining operations are supported by an extensive production and logistics infrastructure, including its own railway network and facilities, which enable it to transport 100% of produced coal from the open?pit mines to the main railway hub at the long?distance railway network, operated by Russian Railways. Furthermore, as the company’s mines are compactly located within 5 km from one another, a number of operations are conducted centrally, thereby minimizing overhead costs and expenses.
In 2012, KTK’s total coal sales reached 10.20 mln tonnes, of which 8.51 mln tonnes were produced by the company and 1.70 mln tonnes were resold after purchasing from third parties. The company maintains a diversified sales structure balanced between export and domestic sales: in 2012, about 42% of coal was sold to domestic consumers and roughly 58% was exported, primarily to Eastern Europe and the Asia?Pacific region.
KTK’s strong regional presence is supported by an extensive retail distribution network, located throughout the Kemerovo, Novosibirsk, Omsk and Altay regions in Western Siberia. As of January 1, 2012, the company’s distribution network included 70 owned and operated PoS and it delivered 3.45 mln tonnes of coal in 2011, positioning KTK as one of the principal suppliers of coal to retail customers in Western Siberia.