2007 Performance Results

In 2007, production of metallurgical and steam coal at the enterprises of Belon Group totaled 4,655,000 tn, thus exceeding the respective index of the preceding year by 37%.

The production volume of metallurgical coal increased by 16% against the 2006 indices to amount to 2,003,000 tn. According to the large-scale modernization of the Listvyazhnaya mine, the production of steam coal increased by 60%—up to 2,652,000 tn.

Growth of the in-house raw material production occurred with a market deficit of metallurgical coal, which is required for the full load operation of Belon’s coal production facilities. As a result, the volume of metallurgical coal preparation and coal concentrate production remained on the 2006 level and amounted to 4,327,000 tn and 3,053,000 tn, respectively. Further increase in the volume of metallurgical coal production at the enterprises of Belon Group will allow a sustained growth of the share of in-house raw materials in the plant’s operation.

The Listvyazhnaya coal preparation plant, which was put into operation last year, produced 505,000 tn of steam coal concentrate in the test mode.

In addition, the Company demonstrated significant improvements in the other core business activities—steel trading and production of construction materials. During the year, the Company sold 314,000 tn of steel mill products, thus exceeding the indices of 2006 by 11%. Belon made a minor increase in brick production, and manufactured 33,022,000 bricks.

Rapid buildup of production volumes is ensured by Belon Group's plan to significantly increase the coal output. In accordance with the Company's development strategy, by 2012 it is expected to produce 14–15 mln tn of coal per year. Belon’s plans for the current year include 1.5-fold output increase as compared to the respective index of 2007, and production of at least 7 mln tn of metallurgical and steam coal.