COAL EXPORT AND THE FUTURECOAL EXPORT …

1 vietnam NATIONAL COAL-MINERAL INDUSTRIES HOLDING CORPORATION LTDHOLDING CORPORATION LT EXPORT AND THE FUTURECOAL EXPORT AND THE FUTURECOAL EXPORT AND THE FUTURECOAL EXPORT AND THE FUTUREIN VIETNAMIN VIETNAMDr. Tr n Xu n H aCEO OF VINACOMIN11 Brief Introduction to VINACOMINB rief Introduction to VINACOMIN vietnam National Coal-Mineral Industries Holding Corporation Ltd. was established on December 26, 2005 by virtue of Decision It is one of 11 largest economic group companies in vietnam , being a state-owned one-member limited liability holding corporation, playing an important role in the government s strategy to ensure efficient and pg gyeffective exploitation of mineral wealth. As a group it comprises of 100 companies, of which 54 subsidiaries wholly owned by VINACOMIN and 46 JSC (equity of 51% and above: 33wholly owned by VINACOMIN and 46 JSC (equity of 51% and above: 33 companies, equity below 51%: 13 companies; ).)

2 It has the chartered capital of US$ 467 million; shareholders equity: US$ 974 million; and revenues of US$ 3 26 billion in 2009US$ 974 million; and revenues of US$ 3,26 billion in 2009. It is the dominant coal producer in vietnam managing over 95% of total coal activities, supplying anthracite and lignite for power generation and pp y ggpgindustrial uses both domestically and globally; It is employing a labor force of 122,600 Current state1. Current state VINACOMIN operates 54 coal mines with total current capacity of It has 5 big opencast mines with capacity more than 2 , 15 open pits with annual capacity from 100 to 700 thousand tons each and some smaller coal mining sites with capacity below 100 gpythousand t/year. Coal produced from opencast mines comprises main part of coal production, accounting for 55 60% of the total volume, stripping ratio is about m3 , stripping ratio is about m/t. There are 30 underground coal mines, of which 9 mines have output of more than million tons/year, others have annual capacity less than 1 mn t There exist smaller mines that have no chance forthan 1 There exist smaller mines that have no chance for introduction of mechanized mining technology.

3 The 3 washing plants are: H n Gai (2,0 ); C a ng (10,0 /) dV D h(30/) ) and V ng Danh (3,0 ). Total raw coal exploitation in the period 2006 2009 is 177 million tons, last year 46-47 of raw coal, equivalent to 43-44 of33tons, last year 4647 of raw coal, equivalent to 4344 of salable coal, were exploitation in period 2006 Coal exploitation in period 2006 20102010 Coal exploitation in period 2006 Coal exploitation in period 2006 20102010 IndicatorsUnit20062007200820092010*1 Raw which: ofopencast output% removalmn g3 Drivage coal 000 Overview of EXPORT SalesOverview of EXPORT SalesppWestern EuropeWestern Europe2009 Exports Volume by Country (> 30 countries)Japan5%EuropeKo rea4%JapanJapan()Others5%China81%Europe5 %ChinaKoreaChinaKoreaCaThailandBilCaThai landBil21 624,124,33040n Tonne)BrazilBrazil6,510,514,721,617,3010 20 Exports (Million5502003200420052006200720082009 Coal for Power, EXPORT and othersCoal for Power, EXPORT and others12010080onsExport60 Million tOthersPower2040 MPower0201990199520002001200220032004200 5200620072008200920102015202020252030666 1990199520002001200220032004200520062007 2008200920102015202020252030 Source: VinacominType of Coal For ExportType of Coal For ExportmntonmntonType of Coal For ExportType of Coal For 6- quality vietnam Coal Resource Potential2 vietnam Coal Resource Potential2.

4 vietnam Coal Resource Potential2. vietnam Coal Resource Potential Total coal resources as of 1stJan, 2010: billion tonsCategories of Resources Identified resources: billion tons, in which measured & indicated reserves (categories A+B+C1) t f33% i fd (C) 39%5%6%A+B+C1account for 33%; inferred (C2) 39% & prognostic resources (P):28%. Prognostic coal resources: billion tons in which89%C2 Pbillion tons, in which+ in Quang Ninh coalfield : billion tons (anthracite); + in Red River Delta coal basin(HungTypes of Coal+ in Red River Delta coal basin (HungYen, Thai Binh): about billion tons (sub-bituminous). Geological & mining conditions are complicated. 20%0%1%AnthraciteFat coal Some fat coal deposits in the North and peat in Mekong river coalSub-bitumPeat coal883. Coal Demand3. Coal Demand3. Coal Demand3. Coal Demand Economydemand: yUntil 2015: based on Power Development Master PlanPeriod 2016-2020:increase 5 5%/yearPeriod 20162020: increase 2021-2030: increase Pdd Powerdemand: Until 2015: based on updated information on power projectsPeriod 2016-2020: increase 2021-2030: increase 99 Demand for coal quality and coal typesDemand for coal quality and coal types Coal for power are commonly bituminous, lignite, peat, but notanthracite In Chinabituminouswasherywaste and slurrynotanthracite.)

5 In Chinabituminous, washery waste and slurry are used for power generation. Consumption in vietnam : lump for production of pppchemicals, fertilizer; fines for cement; fines , for power, fertilizer; fines for construction materials;finesNo 12(local standard) for power plantsusingmaterials; fines (local standard) for power plantsusing low quality coal: Hai Phong, Quang Ninh, Cam Pha plants. As statisticsfor3years 2007-2009coals(TCVNorAs statisticsfor 3years 20072009,coals(TCVNor Vietnamese standard) comprise of 88%, in which, lump coal: 6%, fines of higher grade (fines , 8, 9a): 18%, fines of did(fiN9b1011)60%dlflmedium grade(fines , 10, 11): 60% andcoal of low quality (local standard): 12%. Domestic anthracite for powergenerationisat maximum1010 Domestic anthracite for power generation is at maximum about 60% of supply/demand Coal supply/demand balance balance iin base scenarion base scenario(million tons)(million tons)Ye a r20102015202020252030Ye a coal coal demand2658-68 93-114 135-162 204-241 Other demand 162732-3436-4242-51 Coal for power 1132-42 61-8099-120162-190-Domestic1027406090-Do mestic1027406090-Imported (min/max)5-1521-4039-6072-1001111 Source: Energy Institute, Ministry of Industry and Trade4.)

6 Prospect to development of 4. Prospect to development of vietnam coal industryVietnam coal industryProduction Targets in Master Plan for Coal(Salable Coal) ()(Excluding coal from Red River delta basin) 2010: 45million tons2010: 45 million tons 2015: 58 million tons202070illi 2020: 70 million tons 2025: 85 million tons 2030: 90 million tons1212 Master plan of coal, Master plan of coal, million tonsmillion tonsTTCoal Area20102015202020252030 Total raw East ng B n Gai mPh m Ph coal River Delta Coal44 64755 20975 95599 388100 1321313 Salable for development of coal minesPlan for development of coal mines Mines to be closed in period 2011 - 2030: 19 mines with capacity 11 , in which: 9 open-cut coal mines with total capacity 8,2 t/year: Nui Beo ( ), Ha Tu ( ), South west a Mai ( ), East a Mai ( ), Bang Nau ( ), North west Khe Tam ( ), Khe Sim ( ), West Khe Sim ( ); 10 smaller open-cut coal sites ( ); New coal mines to be constructed:19 mines with capacity 61 , in which: 5 mines owned by Vinacomin in North East basin with capacity 13 ; 9 new mines in North East basin with capacity and 5 il tii HY Th i B hif R d id lt b iith t t lpilot mines in H ng Y n, Th i B nh provinces of Red river delta basin with total capacity 25 Pilot UCG technology and conventional mining method bi t iddd d25id b Viii h Mines to be maintained and upgraded:25 mines owned by Vinacomin with total capacity 50 ; 68 local and peat coal sites with total capacity 10 ;i 201i6hil(40/)h Ch(1 Until 2015: constructing 6 wahing plants ( ): Khe Cham (15 ); Mong Duong (2 ); Lep My (6 ); Ha Lam (10 ); Vang Danh 2 (3,5 ).)

7 Khe Than 1 (4 ). 1414 Between 2016-2025: constructing washing plant Khe Than 2 or Bao Dai (12 ); ong Trieu-Pha Lai (10 ) with 4 coal mines in the area. To ensure National Energy SecurityTo ensure National Energy SecurityVINACOMIN to cooperate with investors and foreign partners to: Enhance geological exploration, explore new mining areas & Red River Delta coal basin. Invest in & construct new big underground coal mines; increase capacity of the e isting minesthe existing mines. Enhance mechanization in underground coal mines; Plan and construct infrastructure in mining areas (centralization of washing Plan and construct infrastructure in mining areas (centralization of washing plants with modern processing lines, transport system and loading ports). Select suitable technology (coal gasification, conventional mining gy (g,gmethod,..) in Red River Delta coal basin. Construct a terminal for coal import in the Southern part of vietnam Co-invest in foreign coal mines to ensure imported coal source; Develop human resources for mining Coal demand increases very much, while infrastructure, technology and management skills are limited; Vinacomin is a multi-business enterprise, leading in coal industry of vietnam and presently implementing large projects (exploration & exploitation of anthracite in Quang Ninh and of sub-bituminous coal in epoo oce Qu gdo subb uous coRed River Delta basin, infrastructure ); Vinacomin is ready to cooperate with organizations and institutions worldwide to develop coal industry in a sustainable manner friendly toworldwide to develop coal industry in a sustainable manner, friendly to environment, with safety, making contribution to the economy development and stability in the region.))

8 Iiblihi li i f iil It is necessary to establish a national commission for importing coal, to develop supporting law and policy for mobilizing investment fund from foreign capital markets (for buying coal mine, and investing in dlf li bddi ilfdevelopment of coal mines abroad and importing coal for power generation)1616 Thk!Thank you!E-mail.