Coking coal quality evaluation and price mechanism: changing the approach Shanghai April 2017

What we have today Premium low-vol HCC 64 Semi-hard CSR Semi-soft                    Semi-hard Semi-soft CSR As a result, coking coals with absolutely different parameters are classified into one group and priced the same. CSR VM ad, % TM ar, A ad, S ad, P ad, Vitrinite, Fluidity, ddpm Y, mm Coal A 45 24 12 8 0.43 0.05 54 300 Coal B 44 17.50 8.00 10.50 0.25 0.022 88 10 Coal C 30 34.50 9.80 8.30 0.85 0.052 86 10000 20

Inaglinsky Coking Coal vs Premium Low-vol   VM ad, % TM ar, A ad, S ad, P ad, Vitrinite, Fluidity, ddpm G index Y, mm Premium Low vol 21.50 9.70 10.50 0.50 0.045 65 500 Inaglinsky 27.60 9.50 10.00 0.40 0.002 98 6000 96 28 It is important to evaluate ALL the parameters and their influence on the quality of the blend                    quality of metcoke                  quality of pig iron/steel, cost of production                   

Main parameters and their role in the blend Vitrinite – component which becomes plastic during caking process and acts as a liquid binder component. As a result, high vitrinite coals can compensate less plastic and less expensive carbon sources (e.g. low-caking coals, coke breeze) Premium low-vol, % 65 Inaglinsky, 98 COST SAVING without quality degradation Fluidity by Gieseler - high fluidity coals act as a liquid binder component in the blend and allow to blend in a bigger proportion of lower quality=cheaper coals Premium low-vol, ddpm 500 Inaglinsky, 6000 COST SAVING without quality degradation

Main parametres and their role in the blend Sulphur – high sulphur in coke requires a bigger amount of lime in the blast furnace increases the amount of of slag and the amount of coke required per 1mt of pig iron Deteriorates the performance of the blast furnace Low sulphur coals allow to blend in more cheaper high sulphur coals Premium low-vol, % 0.50 0.35 Inaglinsky, COST SAVING without quality deterioration Phosphorous – high phosphorous deteriorates the quality of pig iron/steel as it becomes more brittle. Low Phosphorous coals allow to blend in more cheaper high phosphorous coals Premium low-vol, % 0.045 Inaglinsky, 0.002 COST SAVING without quality deterioration

Main parameters and their role in the blend Cold/mechanical strength – shows the ability of coke to avoid yield loss before charging, dust formation and poor bed permeability in the BF. Adding 7-10% of Inaglinsky in the blend improves coke breakage M25 by 2-4% and abrasion index M10 by1%.

Conclusion Each coking coal should be thoroughly evaluated taking into consideration all its quality characteristics. It is possible to reduce expenses for coke and steel production without loss of quality by adding coals into the blend which due to their unique quality properties allow to use a bigger proportion of cheaper lower quality coals. Adding 5-10% of Inaglinsky coal into the blend allows: Reduce amount of high quality expensive coals in the blend Decrease the usage of metcoke in the blast furnace by 3-19 kg per 1 mt of pig iron Decrease pig iron production costs by 5-7% Receive good quality pig iron with low Sulphur and low Phosphorous