PRODUCTION OF FUEL BRIQUETTES FROM FINE COAL WASTE 2016

Technological Advantages About Further Development Collaboration Technological Advantages History of OOO “Innovatsionnyie Tehnologii "Severnaya Rus” 1992 – establishment of the innovative partnership “Severnaya Rus” on the base of “PechorNIIproekt” institute laboratory, later transformed into OOO “Innovatsionnyie Tehnologii "Severnaya Rus” 1992-2003 – the company develops, produces and distributes mining equipment and also complex technological equipment for enterprises that operate in harsh conditions of the Far North 1995 – the company receives the UN official partner certificate in New York Since 2003 – the company develops a new line of business: thermo- and hydro- insulation for industrial and dwelling buildings using solid polyurethane, applied by spraying, eggshell and tiled methods 2010 – the company’s project of decorative thermo-insulating panel production for construction use wins the Komi Republic’s priority innovative projects contest 2011 – years of research had led to creation of the unique technology that enabled production of fuel briquettes from coal slack without using binding additives, which was later tested at OOO “Intinskaya Teplovaya Kompaniya”

Technological Advantages About Further Development Collaboration Technological Advantages History of OOO “Innovatsionnyie Tehnologii "Severnaya Rus” 2013 – the fuel briquettes from fine coal waste production project awarded the first place in the Komi Republic’s priority innovative projects contest 2014 – the experimental line for fuel briquettes from coal slack production was constructed and started 2016: industrial version of the briquette producing machine with an output of 30 000 tons was launched the fuel briquettes from fine coal waste production was included into the list of projects to be realized in the Arctic region of the Russian Federation the company’s technological industrial park project was included into the “roadmap” on support and development of the small and medium entrepreneurship Partners

Technological Advantages About Further Development Collaboration Technological Advantages Unique technology advantages “Severnaya Rus” is the only company in Russia and Europe that produces fuel briquettes from coal slack without using binding additives. These briquettes despite low production costs are on par with or better than traditional coal in terms of efficiency. Traditional coal is twice expensive and does not provide any consumer benefits. The direct who produce briquettes from coal slack with binding additives do not have a competitive advantage: they create a very similar product, yet with a higher production costs (due to higher raw material costs and more complex technological process). Optimal: structure size density humidity Provide: high combustion degree less smoke low level of carbon emission Briquettes are produced from coal slack The “negative costs” materials are used along with reclamation of lands occupied with piles and settling ponds Briquettes could be produced from small coal fractions Low liquidity coal fractions of high quality coal ore are included into the high demand product segment Briquettes are of high mechanical resistance and of low hygroscopicity Warehousing and logistics costs are reduced Briquettes are produced without use of binding additives Exclusion of binding additives could potentially lead to the fuel briquettes use in mettalurgy

Technological Advantages About Further Development Collaboration Technological Advantages Fuel briquettes production line Technology of briquetting without use of binding additives Minimal number of technological stages Usage of coal slack, coal dust and other low liquidity components as raw materials

Technological Advantages About Further Development Collaboration Technological Advantages Benefits Steady demand Fuel briquettes consumers Technology and production lines consumers Housing and utilities infrastructure consumers Household consumers Industry Foreign consumers Small towns and settlements of the Komi Republic Industry (coal, oil, timber) Former coal-mining regions Additional benefits Production facility could be organized on an former ore piles and wastelands Land reclamation and further use Ecology conditions improvement Lower production costs Fuel procurement within the region Achievement of social orientation goals, launching of new manufactures in remote regions

Technological Advantages About Further Development Collaboration Technological Advantages General lines of the technology development in Russia Economy – huge base of “negative costs” raw materials Approximately 1% (~ 3 m tons per year) of overall coal mine excavation settles as a dust and slack on the coal processing facilities grounds. Stable trend of coal refinement will positively affect the growth of fine coal waste quantities. Based on organic components the coal slack is similar to the traditional coal ore. Estimated coal slack stocks А. Novak, Minister of Energy of Russia: «Levels of coal refinement will increase 1,9 times by 2030 compared to 2015 level and will be on a 345 m tons level» ~260,0 M tons Annual growth of coal slack ~3,0 M tons Ecology – one goal of the project is to clean the lands previously polluted during the coal refinement: Decrease the intensity of human impact on the landscapes Recuperation and further use of grounds occupied by the coal production waste (~5000 ha) Government program «Energy efficiency and energy development» sets goals, achieved by the project of “Severnaya Rus”: «Stable fuel and energy resources supply within the country; increase the efficiency of fuel and energy resources use; decrease the anthropogenic impact of fuel and energy industry on the environment»

Technological Advantages About Further Development Collaboration Technological Advantages Technology industrial park production “Severnaya Rus” suggest to build technoparks in Vorkuta and Inta aimed at fuel briquettes production using fine coal waste. The technopark is dedicated to enhance scientific development, engineering, heat supply and ecology improvement of the Komi Republic. Region development Engineering development Ecological use of natural resources Stability improvement and lowering costs of heat supply Regional science development   Techno park capabilities Establishment of an unique assembly manufacture Planned clearing of polluted lands Use of cheaper fuel briquettes instead of traditional coal Scientists involvement in the briquetting technology development Project as a boost for local development Briquettes production: Briquettes production lines: Increase energy independence of the region Reduce procurement fuel costs for housing and utilities infrastructure Supply the cheap fuel for people Improve environmental conditions Create new workplaces Increase the region’s involvement in federal programs Develop machine-tool construction Create new workplaces nearby the park Develop science Increase export of innovative products

Technological Advantages About Further Development Collaboration Technological Advantages Industrial park as a form of briquetting technology development Peat briquetting technology of “Severnaya Rus” provides a unique opportunity for an industrial park which will cover the following: Factories for peat refining and briquetting Heat and energy generation using briquettes as a fuel Manufactures of lines industrial assembly and small factories aimed at fuel briquettes production from peat, coal slack and timber waste R&D departments developing the technology and form a scientific base of knowledge Industrial parks develops within the boundaries of subprogram «Industrial parks» of the main program «Industry development and its competitive ability enhancement». Government Resolution № 328 from 15.04.2014 Funding for creation and development of industrial and technoparks is available through Ministry of Economic Development of the Russian Federation on the basis of the following documents: Government Resolution № 1605 from 30.12.2014 Ministry of Economic Development of the Russian Federation decrees from № 104 and № 105 27.02.2015 The provided funding does not exceed 200 m rubles for one privately owned industrial park. It is given to finance equipment purchase and other needs.

Technological Advantages About Further Development Collaboration Technological Advantages Technology prospects for coke production Use of briquetting technology for coke production from coal slack and small fractions of coal Enrichment Pre-briquetting process Pyrolysis Briquetting Coal slack Briquettes from coke Small fractions Сoke Briquetting Consumers Fuel briquettes Briquettes made without use of binding additives can be used as raw material for coke production with further application in metallurgy During the enrichment stage coal slack and small fractions are mixed in the right proportions to then be processed in the pre-briquetting stage Unlike the small fractions of coal, briquettes can be used for pyrolysis in order to obtain coke On a final stage coke could further be processed into briquettes or sent to the customers as raw material

Technological Advantages About Further Development Collaboration Technological Advantages Federal support of the project Ministry of Economic Development of the Russian Federation Partial cost recovery for techno- and industrial parks infrastructure creation Ministry of Industry and Trade of the Russian Federation R&D funding for civilian industry Ministry of Natural Resources and Ecology of the Russian Federation Government program “Environment protection in 2012-2020” Industry Development Fund Ensuring access of manufacturers to long-term debt financing on competitive terms FASIE Small and medium entrepreneurship R&D funding (programs «Start», «Development», «Cooperation») MSP Corporation Program on stimulation of lending “Program 6,5”

OOO “Innovatsionnyie Tehnologii "Severnaya Rus” Contacts in Moscow: 117997, Vavilova street, 7 Phone/fax: +7 903 547-78-67; +7 (499) 135-50-21 Contacts in Vorkuta: Lenina street, 38 Phone/fax : (82151) 3-59-66 (82151) 7-07-93 E-mail: info@nordruss.ru Website: www.nordruss.ru