OREANDA-NEWS. On November 8 2013, OJSC "Kuzbasskaya Toplivnaya Company" (RTS/MICEX: "KBTK"), one of the largest producers and exporters of thermal coal in Russia, is pleased to announce operational results for the 3 quarter and 9 months 2013.
In Q3 2013 the Company has produced 2.50 mln. tonnes of coal, which is 7% higher than the previously published production plan. Additional amount needed to replace coal purchases from third-party producers, to meet the needs of retail network. Compared with the level of Q3 2012 coal production increased by 12%. The volume of coal processing remained at the level of Q2 2013 and amounted to 2.13 mln. tonnes, which is 35% higher than in Q3 2012. Such an increase in year-on-year due to introduction of the washing plant "Kaskad-2". The share of processed coal in the commercial products amounted to 85%. The total coal washing in the Q3 rose 13% to 0.80 mln. tonnes of which 69% relates to the washing plant "Kaskad-2". The volume of coal sorting decreased by 7% compared to the Q2 and amounted to 1.33 mln. tonnes.

The volume of stripping remained at the level of Q2 and reached 14.81 mln cubic meters, which is 7% higher than in Q3 2012. The volume of blasted rock mass was 7.50 mln. cubic meters, an increase for the quarter by 13%. The share of blasted rock in the stripping was at the level of 55%. Average distance of stripping transportation in the last quarter rose by 15% to 3.00 km. The average stripping ratio in Q3 remained at the level of Q2 and amounted 5.90. According to the production plan, the stripping ratio in Q3 was down to 5.85, but it was an over-fulfillment of the plan due to utilization of high-performance mining equipment. Year-on- year, the stripping ratio decreased by 4%.

In Q3 sales increased by 38% versus the volume of Q2, reaching 2.98 mln. tonnes of coal due to seasonal consumption of thermal coal in Russia. Year-on-year, this figure shows an increase of 23%. In Q3 export sales rose 13% to 1.96 mln. tonnes, due to the additional volume of clean coal produced at the washing plant "Kaskad-2". For the quarter, the share of exports in total sales of coal fell from 81% to 66% due to a seasonal increase of sales in the domestic market. Coal sales in the domestic market increased by 143% due to increased demand from retail customers in anticipation of the heating season and reached 1.02 mln. tonnes. The volume of coal purchased for resale increased by 20% to 0.59 mln. tonnes.

In Q3 2013, the average selling price of coal has increased by 12% compared to Q2 figure, amounting to RUB 1,146 per tonne. Compared to Q3 2012, the average price decreased by 10%. The average selling price in the domestic market increased by 13% on the back of seasonal growth of demand and reached RUB 1,368 per tonne. Compared to Q3 2012, the average selling price in the domestic market increased by 9%. The average selling price of coal for export increased by 5% reaching RUB 1,030 per tonne. Year-on-year, the average price of export sales decreased by 20%.

During the 9 months of 2013 the Company produced a 7.39 mln. tonnes of coal, which is 17% higher than in the same period of 2012. Most of the growth came on the open-pit mine "Vinogradovsky", which was produced 2.48 mln. tonnes of coal, which is 203% higher than last year. At the same time by 11% to a level of 2.57 mln. tonnes of production was down on the open-pit mine "Cheremshansky". These changes are implemented in order to reduce the average cost of production because cut "Cheremshansky"' production costs are higher.

The volume of coal processing totaled 6.05 mln. tonnes, up 21 % compared to the 9 months of 2012. The share of processed coal in the company's commercial products was 82%. After the introduction of the second washing plant "Kaskad-2", the total coal washing increased by 203% to 1.88 mln. tonnes. The volume of coal sorting decreased by 5% compared to last year and amounted to 4.17 mln. tonnes. The volume of blasted rock mass was 20.50 mln. cubic meters, and decreased by 21%. The average distance of stripping transportation over the past 9 months decreased by 5% to 2.70 km. The average stripping ratio for the 9 months of 2013 decreased by 28% to 6.00.
Coal sales for the 9 months of 2013 increased by 3 % compared to the same period in 2012 and amounted to 7.52 mln. tonnes. Exports increased by 15 % to 5.10 mln. tonnes, which corresponds to 68% of total sales. Domestic sales decreased by 15% to 2.42 mln. tonnes against the increased competition in the segment supplies for energy generating industry. The volume of coal purchased for resale decreased by 18% to 0.99 mln. tonnes due to the reorientation of the Company to sell the maximum amount of coal produced.

During the 9 months of 2013 the average price of coal sales amounted to RUB 1 074 per tonne, a decrease of 18% compared to the same period last year. The main driver of price reduction was export to markets of the Asia-Pacific region. The average price of export sales decreased by 27% to RUB 977 per tonne. The average price in the domestic market increased by 2% to a level of RUB 1,276 per tonne.