SOLID FUEL IMPORTS OF TURKEY M. SABRİ ORAL Executive Vice President ODAK GROUP

TURKEY 15th. largest economy worldwide 7 pct av. growth per annum during last 5 years 24 million mtons of SOLID FUEL IMPORTS

Types and Quantity of Imports Sector Type Source Tonnage House Heating Sized coal Russia, China, South Africa 9.500.000 Electricity, cement Steam coal Russia,Colombia, South Africa, 5.500.000 Steel Coking coal USA, Australia, Canada, Russia 5.000.000 Cement Petcoke USA 2.000.000 PCI Russia 500.000 Anthracite, coke breeze Steel, sugar Metcoke China, Ukraine, Russia Total 23.500.000

Types and Quantity of Imports

STEEL INDUSTRY

Crude Steel Production Turkey is 11th largest Steel Producer worldwide Steel sector in Turkey is expanding Crude Steel Production 2007 23 million tons 2009 30 million tons 75 pct. of production by Electric Arc Furnace 25 pct. of production by Integrated Plants ERDEMIR, ISDEMIR, KARDEMIR are three Integrated Plants

Traditional coking coal / PCI shippers Coking coal USA Australia Canada PCI Russia

Coking Coal & PCI Imports of the Industry Type of Coal Source 2007 (Mt.) 2009 (Mt.) Coking Coal USA Australia Canada Total 5 M. 6,3 M. PCI Russia 0,5 M. 1,2 M.

Demand & Supply Status of Coking Coal China and India issue Expansion plans of the steel mills in Turkey, Russia and neighbours Demand to USA coal from nontraditional destinations Both loacal and global appetite growing SUPPLY Very high freights from Canada and Australia Congestion at Newcastle Low Vol force majeurs at USA Shrinkage in Polish production Inefficiencies in Russian Logistics

Impacts of Demand / Supply Status on the steel industry of our Region Australian and Canadian Coals are less competitive. Russian and Polish coals not sufficient to be widely exported. Demand to USA coals are growing. Even Poland and Russia imported USA coals.

CEMENT INDUSTRY

2006 2nd largest Cement and Clinker producer in Europe with 30 million mt CLINKER production capacity 2008 LARGEST Cement and Clinker producer in Europe with 43 million mt CLINKER production capacity

Solid Fuel for Cement Industry 2 million tons USA origined PETCOKE 2 million tons UNDERSIEVE STEAM coal of sized coal 0,5 million tons direct STEAM COAL imports 0,5 million tons domestic LIGNITES

Further the expansions at 2007/2008, 2 million fresh tons of solid fuel will be needed, Potential sources; Petcoke – Still the most desirable high CV solid fuel for cement. Undersize steam coal – The amount will be less Steam Coal – Theoritically possible, however Russian and other alternative supplies is far from meeting not even the demand of coal fired utilities of the region regardless of cement’s needs.

STEAM COAL FOR POWER PLANTS

Source profile of TURKISH electricity production

Added Electric demand 3500 MW / year If only 10 pct. of this demand is sourced by imported coal fired plants, after 10 years 10 million mtons more of imported STEAM COAL will be needed

SIZED COAL FOR HOUSEHOLD INDUSTRY

Turkey is the worldwide largest sized coal market, Total sized coal imports 9,5 million mt/annum, Russian origin 6,5 million mt/annum RSA origin 1,5 million mt/annum Chinese origin 1,5 million mt/annum

1992 – 2006 SIZED COAL imports (million tons)

ODAK GROUP Pioneers of Solid Fuel Import and Distribution activities in Turkey,20 years of experience. Total solid fuel imports for household and cement industries are 1,5 million tonnes. Classification and packing facilities at 4 locations;(Istanbul, Iskenderun, Izmir, Gemlik) Representatives of Alpha Group of USA , a major USA coking and thermal coal producer and exporter ,and one of the regular cokingcoal suppliers of the Turkish steel industry.

Executive Vice President COAL IMPORTS OF TURKEY M. SABRİ ORAL Executive Vice President ODAK GROUP