© Kazim Okutan – December 2014, Antalya www.kazimokutan.com 48,000 MT/YEAR LOW CARBON FERROCHROME PRODUCTION PROJECT IN TURKEY © Kazim Okutan – December 2014, Antalya www.kazimokutan.com

CHROME ORE FACTS

CHROME ORE END MARKETS ; 30,000,000 MT 2013 GLOBAL PRODUCTION

CHROME ORE FACTS

CHROME ORE END MARKETS

Low Carbon Ferrochrome If Ferrochrome consists of < 0.5 % C it is considered as low carbon ferrochrome LC FeCr is used as an alloying agent for high quality steels and some stainless steels. Like high carbon ferrochrome LC FeCr contains 65-75 % Cr LC FeCr is sold in $cent / lb Cr content Actual LC FeCr Price : 198 – 205 $cent / lb Cr (100 % Cr 4365 - 4520 $/ton) For LC FeCr, if C content decreases LC FeCr price increases; target 0.03 % - 0.10 % C Fe is given free off charge : High Cr content is advantage for the alloy producer Alloy producer has to consume high quality, high Cr/Fe ore contented ore Turkish ores usually have high quality; suitable for LC FeCr production Major LC FeCr producers worldwide : Russia, Kazakhstan, Turkey, Germany

Charge - High Carbon - Medium Carbon - Low Carbon Ferrochrome Production ; Global 2013

Medium Carbon - Low Carbon Ferrochrome Production ; Global 2001-2013

Low Carbon Ferrochrome Production Process Classical LC FeCr production process is Perrin Process; Whereas, in a separate AC, 3 phase submerged electric arc furnace silicon ferrochrome alloy (38-45 % Si, 36-40 % Cr) is produced using lumpy chromite, quartzite, coke In another AC- DC furnace 3 or single phase, chromite concentrate is molten with lime Within the huge laddles, these two smelted liquids are mixed to react Silicon-Si and chrome oxide-Cr2O3 to produce low carbon ferrochrome. Slag is granulated in water, metal is casted in to cast iron moulds with a special design ADV : Well known proven process,low chromite losses to slag, flexible, easy usage of return metals DisADV : High refractory consumption (laddle) due to high temperatures, energy losses high to air, dangerous – metal/slag splitting, requires highly developed skills – operators, difficult to control temperature and violent reactions

Low Carbon Ferrochrome P&L, CAPEX, OPEX Low Carbon Ferrochrome Production Project Project Basis 48,000 MT/year LC FeCr <0,1% C, 70% Cr ; Power Setup 70 MVA Designed SiFeCr furnace capacity : 2x15 MVA ; 31.000 MT/year SiFeCr 45 % Si – 38 % Cr production. SifeCr will be used internally. Assigned capacity for chromite-lime furnace : 2x15 MVA 48.000 MT/year LC FeCr 70 % Cr – 0.03 – 0.10 % C production – 10-50 mm product base Total slag generated by both furnaces will be around 120.000 MT/year Stage 1: Installation of 15 MVA SiFeCr furnace and 15 MVA chromite-lime furnace. Stage 1 to commissioning 18-24 months. Stage 2: Installation of 15 MVA SiFeCr furnace and 15 MVA chromite-lime furnace Stage2 will start 6 months after commissioning Stage 1 and it will take 14 months to commissioning.

Low Carbon Ferrochrome P&L, CAPEX, OPEX MRP : Material Requirement Plan For 48,000 MT/year LC FeCr Specific Raw Material Consumptions for ton/ton LC SiFeCr - Perrin Process 1) Chromite Concentrate 1.75 ton/ton 48 % Cr2O3 – Cr/Fe 3.3 2) Chromite Lumpy Ore 0.85 ton/ton 46 % Cr2O3 – Cr/Fe 3.3 3) Metallurgical Coke 0.52 ton/ton min 84 % C 4) Quartzite 1.05 ton/ton min 96 % SiO2 5) Bauxite 0.15 ton/ton min 60 % Al2O3 6) Lime – Unburnt 1.20 ton/ton min 97 % CaO 7) Söderberg Paste 0.052 ton/ton 8) Total Energy 9500 kWh/ton

Low Carbon Ferrochrome P&L, CAPEX, OPEX MRP : Material Requirement Plan – 48.000 MT/year LC FeCr Raw Material Requirement ton/year wet basis - Perrin Process 1) Chromite Concentrate 84.000 ton 0-2 mm 2) Chromite Lumpy Ore 40.800 ton 10-120 mm 3) Metallurgical Coke 25.000 ton 10-40 mm 4) Quartzite 50.000 ton 10-120 mm 5) Bauxite 7.000 ton 10-120 mm 6) Lime – Unburnt 57.600 ton 0-4 mm 7) Söderberg Paste 2.500 ton 8) Total Electrical Energy 456.000.000 kWh 9) Employment (total) 255 employees

Low Carbon Ferrochrome P&L, CAPEX, OPEX CAPEX : $ 80 MILLION +/- % 30 variation according to the chosen process, equipment, tenderer 18 - 24 months to commissioning (1st Stage) 30 - 35 % Profit Margin – Before Tax $ 150 MILLION TURNOVER ANNUALLY (2 Stage) $ 50 MILLION NET PROFIT ANNUALLY – Before Tax (2 Stage) INVESTMENT RETURN RATE 2 YEARS max. (2 Stage) DEMAND TO CHROME – CHROME ALLOYS WILL BE INCREASING EACH YEAR PARALLEL TO GROWTH IN CHINA TARGET MARKETS : NORTH AMERICA – WESTERN EUROPE - JAPAN

SWOT ANALYSIS 62 Years of LC FeCr production experience,know-how and qualified human resources in Turkey (Eti Elektrometalurji AS) Stable market and price High quality Turkish chromite, Mergers and associations with global players Globally growing Turkish economy Access to global markets

SWOT ANALYSIS High energy prices Competition from local player (Eti Elektrometalurji) High chromite Cr/Fe ratio necessity for high profit Government regulations (EU regs.) Declining global economy Decreasing high quality local chromite reserves

Turkish Chromite Mining Zones

Turkey's Investment Incentives System and Regions Map Region 1 most developed; region 6 least developed area For detailed information refer to : http://www.invest.gov.tr/en-US/investmentguide/investorsguide/Pages/Incentives.aspx

Railways Map of Turkey

Main Industrial Ports in Turkey

Turkey 154 KV High Tension Lines Map