- 0 - © HMS Bergbau AG not to be copied or distributed without written consent From Coal to Biomass HMS Bergbau AG HEAT AND POWER GENERATION WITH RENEWABLE ENERGY 17th May 2011, Dublin - Confidential and Preliminary - not to be copied or distributed without written consent

- 1 - © HMS Bergbau AG not to be copied or distributed without written consent HMS Bergbau AG ( HMS, based in Berlin, trading of steam coal, coking coal, anthracites and biomass (wood pellets, PKS, agro biomass) into Europe, India, Asia from Russia, South Africa, Americas, Indonesia Expanding into coal production with projects in Poland, South Africa, Indonesia and strongly growing in the field of biomass Founded by Heinz Schernikau in 1995 industry veteran, used to run Eastern Germany‘s coal and energy trading business Publicly listed at Frankfurt stock exchange in December 2008 still family run and majority owned by Schernikau family

- 2 - © HMS Bergbau AG not to be copied or distributed without written consent HMS Representative Office Bristol, Tennessee, USA Headquarter HMS Bergbau AG Berlin, Germany HMS Bergbau Polska Sp. Z o.o. Katowice, Poland HMS Niwka Coal Production Sp. z o.o. Katowice, Poland PT. HMS Bergbau Indonesia Jakarta, Indonesia HMS Representative Office Singapore HMS Representative Office Lahore, Pakistan HMS Representative Office Mumbai, India privileged and confidential Where we are active…

- 3 - © HMS Bergbau AG not to be copied or distributed without written consent Port Kintap, South Kalimantan

- 4 - © HMS Bergbau AG not to be copied or distributed without written consent World – Primary energy mix – Scenario 2100 What lies behind the oil age? Source: World Coal Institute, i001 Nuclear Hydro Biomass GAS Solar Other 0% 20% 40% 60% 80% 100% Oil Coal

- 5 - © HMS Bergbau AG not to be copied or distributed without written consent From Coal to Biomass – EU Reduction Targets Main biomass driver: EU 20/20 reduction targets Substitution of coal by biomass – in stand alone plants or in co-firing systems Countries with a high share of coal in their electricity production matrix can reach the ambitious EU-target only by burning biomass Biomass is the cheapest and smoothest way in order to have a fast reductions of CO 2 emissions. Main importing countries of biomass in Europe: Denmark, Sweden, Belgium, Netherlands, Italy, Poland, UK, Situation in Germany: Solid biomass is only subsidized in the domestic market and in CHP plants No support for big co-firing projects due to the unbundling approach of the EEG – Renewable Energy Law

- 6 - © HMS Bergbau AG not to be copied or distributed without written consent Worldwide Technical Biomass Potential Source: Kaltschmitt, 2009, p. 10f

- 7 - © HMS Bergbau AG not to be copied or distributed without written consent Worldwide Biomass trade – Traders Market Source: IEA Bioenergy ExCo65 (in Mio. t)Bio ethanolBio diesel Wood Pellets Worldwide Production 52,910,611,5 Internationally traded volume 3,72,9ca. 4,0 Main exporting countries Brazil USA, Argentina, Indonesia, Malaysia Canada, USA, Baltic Countries, Finland, Russia Main importing countries USA, Japan, EUEU Belgium, Netherlands, Sweden, Italia International Biomass trade Liquid Biomass: Ethanol – has a very long history in Brazil – fuel flex cars. Bio Diesel – driven by EU subsidies Solid Biomass: Woodchips: 30 Mio tons; 4,5 (15 % for power and heat supply) Wood Pellets: 4,0 Mio tons Industrial Pellets – nearly no seaboard trading of premium pellets.

- 8 - © HMS Bergbau AG not to be copied or distributed without written consent HMS Biomass – What we trade… Wood Pellets: Premium pellets for residential usage and industrial pellets for commercial and industrial customers Different cooperations with reputable pellet producers Wood Chips:Mainly on a regional basis Agro Biomass: Sunflower-husk-pellets and straw-pellets from the Ukraine olive cake North-Africa Palm Kernel Shells:From Indonesia and West-Africa Torrefied Pellets:“The Holy Grail” of the Industry – but no quantities available on the market yet

- 9 - © HMS Bergbau AG not to be copied or distributed without written consent Palm Kernel Shells Since 2007, Indonesia has become the largest palm oil producer Annual production approx. 20 mio tonnes crude palm oil (CPO) During the production of palm oil several residues become available Palm kernel shells (PKS) or palm nut shells (PNS) are the biggest residues in terms of quantity. PKS represents about 6-8% of the fresh fruit bunch production

© HMS Bergbau AG not to be copied or distributed without written consent Characteristics of PKS Low ash content below 3 % (ARB) Moisture content % (ARB) High energy density GJ/t – 60% higher than green wood chips Not sensitive to rain and can be stored open without an significant increase of water content. Bulk density 650kg/m 3 (coal: kg/m 3 ) PKS are shipped in bulk Very slow degradation of material Negligible dusting Can be used as a single fuel in power plants but can also be used for blending or co-firing.

© HMS Bergbau AG not to be copied or distributed without written consent Black Pellets - Torrefication Process Torrefication: Partial-combustion without oxygen Process: Pre-drying °C, heating up to °C, pyrolysis °C Effect: Reduction of moisture content, reduction of acids, reduction of volatile matters, reduction of mass by 30%, reduction of NCV by 10% Agricultural residues Mixed organic waste Woody biomass Torrefication Pelletisation

© HMS Bergbau AG not to be copied or distributed without written consent Torrefied Pellets Advantages: High Feedstock-Flexibility: agricultural residues, wood waste, saw dust, wood chips – increase in production potential & availability Storage characteristics: water resistance - can be stored in uncovered stockpiles Excellent Grindability: existing coal infrastructure can be used Very homogenous end-product Reduction of SO x and NO x during combustion CharacteristicsTorrefied PelletsNormal Wood Pellets NCV (ARB)20-22 MJ/Kg16-18 MJ/Kg Bulk Density Kg/m Kg/m 3 Energy Density20-22 MJ/kg10-12 GJ/m 3 Moisture3%~ 10% Market Situation: Huge demand but no significant supply yet Most projects are still in very early stages “Power producers are willing to pay extra 2-3€ /GJ only due to the better storage- and handling characteristics” Rob Marcus, Vattenfall

© HMS Bergbau AG not to be copied or distributed without written consent Thank You! (