SOLID FUEL IMPORTS OFTURKEY

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

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

Steel PCI Russia 500.000

Steel Anthracite, coke breeze Russia 500.000

Steel, sugar Metcoke China, Ukraine, Russia 500.000

Total 23.500.000

Types and Quantity of Imports

9.500.000

5.500.0005.000.000

2.000.000

500.000 500.000 500.000

0

1.000.000

2.000.000

3.000.000

4.000.000

5.000.000

6.000.000

7.000.000

8.000.000

9.000.000

10.000.000

sized coal steamcoal

cokingcoal

petcoke pci anthracite metcoke

Types and Quantity of Imports

STEEL INDUSTRY

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, KARDEMIRare three Integrated Plants

•Steel sector in Turkey is expanding

•Turkey is 11th largest Steel Producer worldwide

Traditional coking coal / PCI shippers

Coking coal USA

Australia

Canada

PCI Russia

Coking Coal & PCI Imports of the Industry

Type of CoalSource 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

DEMAND• 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 Statuson 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

20062nd largest Cement and Clinker producer in

Europe with 30 million mt CLINKER production capacity

2008LARGEST 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;

i. Petcoke – Still the most desirable high CV solid fuel for cement.

ii. Undersize steam coal – The amount will be less

iii. 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

0

5

10

15

20

25

30

35

40

45

50

Percentages 47 20 18 6 5,5 3,5

Natural Gas Hydraulic Local Lignite Fuel oilImported Steam

CoalOther

Added Electric demand3500 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 imports9,5 million mt/annum,

Russian origin 6,5 million mt/annumRSA origin 1,5 million mt/annumChinese origin 1,5 million mt/annum

0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

rsa 1,0 1,0 1,0 1,0 1,0 1,0 1,5 1,5 1,5

russia 1,0 1,0 3,0 3,0 3,0 4,5 6,0 5,5 6,5

china 0,0 0,0 0,0 0,0 0,0 0,5 1,0 1,5 1,5

total 2,0 2,0 4,0 4,0 4,0 6,0 8,5 8,5 9,5

1992 1994 1997 2001 2002 2003 2004 2005 2006

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.

COAL IMPORTS OFTURKEY

M. SABRİ ORAL

Executive Vice President

ODAK GROUP