1. London, Houston, Washington, New York, Portland, Calgary, Santiago, Bogota, Rio de Janeiro, Singapore, Beijing, Tokyo, Sydney, Dubai, Moscow, Astana, Kiev, Porto and Johannesburg illuminating the markets Market Reporting Consulting Events Energy and commodity price benchmarking and market insights

2. An Introduction to Argus and our met coal coverage Lisbon Nick Edström November 2015

3. illuminating the markets Argus Media is the world’s largest privately held PRA Headquartered in London, with globally 700+ staff Argus publishes market prices, market commentary, analysis and news for physical energy and metals commodity markets: Crude and oil products Biofuels Natural gas and power Coal and biomass Emissions Fertilizers Freight Petrochemicals and LPG Coking coal, iron ore, scrap and steel Who are we? Copyright © 2015 Argus Media Ltd. All rights reserved.

4. illuminating the markets Argus produces API indices with IHS in the thermal market Iron ore – BHP Billiton’s Jimblebar fines (TSI:Argus) Ferrous scrap – index-linked scrap cargoes sold to Turkey (TSI: Argus) Established PRA in dry bulk markets Copyright © 2015 Argus Media Ltd. All rights reserved.

5. illuminating the markets Nick Edström – Sr Editor, Ferrous (Global) Chris Newman – Sr Editor, Raw Materials (Singapore) Ronan Murphy – Deputy Editor, Met coal (London) Sergey Sokolov – Editor, Coal (Moscow) Ross Allen – VP, Business Development (Houston) Team of 6 market reporters globally Argus Media coking coal team Copyright © 2015 Argus Media Ltd. All rights reserved.

6. illuminating the markets Met coal assessments in US and Australia since 2010 Colombian met coal assessments since 2012 Mid-vol HCC assessments in Asia since 2014 Chinese met coke (62 and 65 CSR) since 2014 PCI fob Baltic and cif ARA assessments since Jan 2015 LV and MV PCI assessments in Asia since July 2015 Rail freight assessments in US and CIS Dry bulk freight assessments Russian metallurgical assessments scheduled for launch in Q1 2016 Met coal price assessments Copyright © 2015 Argus Media Ltd. All rights reserved.

7. Argus methodology Copyright © 2014 Argus Media Ltd. All rights reserved.

8. illuminating the markets Argus assessments formed by 50pc volume-weighted average (VWA) of deals, 50pc market survey Market survey maximises liquidity in markets without tradition of reporting to PRAs (China/India) Permits index-construction regardless of underlying liquidity – but time-intensive and requires skilled team Argus met coal methodology Argus assesses different delivery locations independently (fob Australia, cfr northern China, cfr India) Our fob Australia index is not a netback of cfr China index Avoided problems around vessel class when deriving netbacks Brand differentials often specific to markets/geographies (Indian appetite for higher fluidity etc) Copyright © 2015 Argus Media Ltd. All rights reserved.

9. illuminating the markets Transactions are the single most important basis for assessing the market. We seek to verify deals wherever possible with both parties before inclusion. We accept confirmation by one side of the transaction when in line with price levels from survey. Underlying principles behind Argus methodology Hard bids and offers, and other broader market information emerge and help shape daily view of market trends and repeatable price levels. Information on deals, bid and offer levels can be tested during daily market engagement. Copyright © 2015 Argus Media Ltd. All rights reserved.

10. illuminating the markets This iterative process of testing, verifying and confirming supports primary checks on market data. Assessments subject to external audit and internal controls. Our methodology meets IOSCO guidelines. Argus checks on submissions Transactions not transacted at arm’s length, including deals between related parties or affiliates. Transaction prices that deviate significantly from the mean of all transactions submitted for that day. Transaction prices that fall outside of the generally observed lows and highs that operated throughout the trading day. Single deal volumes that significantly exceed the typical transaction volume for that market. Transaction details that are identified by other market participants as being for any reason potentially anomalous and perceived by Argus to be as such. Transaction details that are reported by one counterparty differently than the other counterparty. Any transaction details that appear to the reporter to be illogical or to stray from the norms of trading behaviour. This could include but is not limited to divergent specifications, unusual delivery location and counterparties not typically seen. Transactions that involve the same counterparties, the same price and delivery dates are checked to see that they are separate deals and not one deal duplicated in Argus records. Copyright © 2015 Argus Media Ltd. All rights reserved.

11. illuminating the markets Index relevant coals include: Peak Downs, Illawarra, Saraji, Goonyella, Goonyella C, Riverside, German Creek, Wollombi, Oaky Creek, Hail Creek LA, Oaky North and Peak Downs North CSR, fluidity, VM and consistency major drivers of price and classification. Asia-Pacific premium low-vol HCC specifications Copyright © 2015 Argus Media Ltd. All rights reserved.

12. illuminating the markets Index relevant coals include: Woodlands, Windsor, Burton HCC, Metropolitan Hard coking coal, Lake Vermont, Curragh, Kestrel*, Carborough Downs, Tuhup and Dawson *Prices in tier 2 category because of high fluidity Asia-Pacific mid-vol HCC specifications Copyright © 2015 Argus Media Ltd. All rights reserved.

13. illuminating the markets Relativities to Argus Tier 1 fob Aus index Copyright © 2015 Argus Media Ltd. All rights reserved.

14. illuminating the markets Argus applies quality adjustments in its normalisation of deals that fall outside of brand min/max limits. These values are aligned with market practices of most active spot market participants. Vast majority of trades fall within typical brand specs Brand is the dominant factor driving valuation of coking coals for major Asia-Pacific mill spot buyers. Quality adjustments Relative chemistries are only one of many factors influencing price: Size and negotiating power of miner Brand perception and consistency Buyers’ blending goals Brand availability in market Chemical qualities: sulphur, fluidity and CSR Some traders are keen to move to spec-based trading, but the market has not yet embraced single set of adjustments. Copyright © 2015 Argus Media Ltd. All rights reserved.

15. illuminating the markets Argus developed a ViU normalisation model for iron ore with an external technical consultant One main point of origin (W Australia) and one main destination (China) Based on assumptions around Tangshan steelmakers’ importance in seaborne spot market, we could model the Fe, Si and Al differentials (after 15 months) Our published diffs were and are well removed from empirical market behaviour Coking coal is a substantially more technically challenging commodity Buyers in different regions blend the coals differently, mix with different local coals, blend with merchant coke, and have different tolerances for consistency Finished steel products also impact mill tolerances Understanding commodity specifics is prerequisite of job Assumptions around PCI injection rates kg/tHM or coke rates kg/t HM may allow us to produce coal/coke spreads – but they won’t reflect actual usage A word on ViU adjustments Copyright © 2015 Argus Media Ltd. All rights reserved.

16. illuminating the markets Argus has noted decline in fixed-price spot liquidity since July Decline consistent with Chinese spot buying activity Domestic cost of met coal production lowered (salary, VAT, tax cuts) Data volumes Copyright © 2015 Argus Media Ltd. All rights reserved.

17. illuminating the markets Composition of Chinese imports Copyright © 2015 Argus Media Ltd. All rights reserved.

18. illuminating the markets Australian hard coking coal exports to India exceeded 3mn t in September for first time. Japan imported 2mn t of Australian coal, more than China (1.8mn t). Growth of new Indian integrated capacity will fuel further growth. Shifting structure of coking coal market Copyright © 2015 Argus Media Ltd. All rights reserved.

19. Any questions?

20. Nick Edström Senior Editor, Ferrous Email: nick.edstrom@argusmedia.com Phone: + 44 20 7780 4262 Office: +44 20 7780 4200 Copyright notice Copyright © 2015 Argus Media Ltd. All rights reserved. All intellectual property rights in this presentation and the information herein are the exclusive property of Argus and and/or its licensors and may only be used under licence from Argus. Without limiting the foregoing, by reading this presentation you agree that you will not copy or reproduce any part of its contents (including, but not limited to, single prices or any other individual items of data) in any form or for any purpose whatsoever without the prior written consent of Argus. Trademark notice ARGUS, ARGUS MEDIA, the ARGUS logo, DeWitt, FMB, FUNDALYTICS, ARGUS publication titles and ARGUS index names are trademarks of Argus Media Limited. Visit www.argusmedia.com/trademarks for more information. Disclaimer All data and other information presented (the “Data”) are provided on an “as is” basis. Argus makes no warranties, express or implied, as to the accuracy, adequacy, timeliness, or completeness of the Data or fitness for any particular purpose. Argus shall not be liable for any loss or damage arising from any party’s reliance on the Data and disclaims any and all liability related to or arising out of use of the Data to the full extent permissible by law.