SIBERIAN COAL ENERGY COMPANY

Investor presentation 2016

Fuelling industry Powering the world

Disclaimer

This presentation has been prepared by SUEK Group (the “Company”). The information in this presentation is provided in a summary form and does not purport to be complete.

This presentation contains certain “forward-looking statements”. All statements, other than statements of historical fact, are forward-looking statements that involve risks and uncertainties. There can be no assurances that such statements will prove accurate and actual results and future events could differ materially from those anticipated in such statements. Such information contained herein represents management’s best judgement as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statement.

This presentation does not constitute or form part of, and should not be construed as, an offer, invitation or recommendation with respect to any of the facilities of the Company, or an offer, invitation or recommendation to sell or issue, or the solicitation of an offer to buy or acquire, the facilities or any of the securities of the Company in any jurisdiction or an inducement to enter into any investment activity. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied upon in connection with, any contract or commitment or investment decision whatsoever.

The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change. This presentation contains information derived from public sources that have not been independently verified.

1

Content

2

1. SUEK at Glance

• Company Overview

• Our Strategy

3 4 5

2. Our Operations

• Production Assets

• Logistics

• Key Operational Figures

• Sales Geography

• SUEK Sales

• Coal Market Review

•6

•7

•8

•9

•10

11

12

3. Our Financials

• Key Financial Figures

• Cash Cost Curve

• Key Investment Projects

•13

•14

•15

•16

4. Our Corporate Social Responsibility

• Social Investments and Community Development

• Environmental Protection

• Personnel Development and Health&Safety

•17

•18

•19

•20

5. Contacts •21

3

SUEK at a Glance

Sources: SUEK estimates, public filings Notes: 1 SUEK’s proved and probable reserves, according to the April 2011 report by SRK Consulting, amounted to 5.9 billion tonnes. Including extraction between April 2011 and December 2015 and SRK assessment of the Apsatsky coalfield carried out in 2015, these reserves stood at 5.5 billion tonnes as at 31 December 2015. 2 Production and export sales include all types of coal 3 Where SUEK Group is one of the major shareholders

Company overview

4

№1

№4

• SUEK is one of top-10 coal producers and exporters:

- 4th largest coal company by international sales volume

- 6th largest coal producer by total output

- 6th largest coal company in the world by reserves – 5.5

bln tonnes1

- No.1 Russian coal producer and exporter

- 1,500 customers from 37 countries

- 32,124 employees

• Vertically integrated business model:

- 26 underground and open-pit mines

- 10 washing and processing plants

- 3 ports3 with total annual capacity of c.35 mln tonnes

- trading network covering almost all SUEK’s key markets

• Stable financial position:

- EBITDA in 1H 2016 – $407m

- EBITDA margin in 1H 2016 – 23%

- Net Debt / bank EBITDA in 1H 2016 – 3.23x

- Ba3 Moody's credit rating (confirmed in April 2016)

• Cost-efficient capacity development programme

- brownfield expansion of mines and washing capacities

- increase in operational efficiency and safety

- brownfield expansion of port capacities

2015 coal2 production by leading Russian companies, mln tonnes

2015 coal2 export sales by leading global producers, mln tonnes

11.0

13.2

13.3

13.4

13.7

20.6

23.2

30.0

49.8

97.8

KTK

Severstal

Russian coal

En+ Group

Sibuglemet

Evraz Group

Mechel

SDS-Ugol

UGMK

SUEK

29.2

30.1

37.5

38.7

40.4

44.4

46.9

55.0

71.7

110.3

Kideco

Rio Tinto

Banpu

Peabody

Adaro

Bumi

SUEK

Anglo American

BHP Billiton

Glencore

Our Strategy

Already the top coal producer in Russia, we want to be one of the leading coal companies in the world. We continually look for opportunities to reinforce competitive advantage, expand our market share and develop a socially responsible business

5

Focusing on efficient growth

• Increasing production of high-quality coal products

• Balanced management of the reserves portfolio

• Strengthening position in Asia-Pacific and Atlantic markets

• Retaining our position as the largest coal producer and supplier of thermal coal in Russia

• Increasing sales of metallurgical and premium sized coal

Committed to sustainable development

• Developing social infrastructure in the regions where we operate

• Reducing adverse environmental impact

Improving operational efficiency and productivity

• Improving efficiency of production activities

• Improving coal quality

• Ongoing programme for modernising mining equipment

Developing coal supply logistics

• Development of own rail infrastructure and rail fleet

• Efficient management and expansion of our export ship-loading capacity from Russia

Achieving high safety standards

• Introducing high international standards in Health and Safety

6

Our Operations

Brown coal 1 underground

mine 1 open pit 1 processing

facility 1 washing plant Domestic/export

market

61.1

36.7

Hard coal Brown coal

1

Production Assets

7

Hard coal 9 underground

mines 2 open pits 5 washing

plants Domestic/export

market

Kemerovo

Brown coal 3 open pits Domestic

market mainly

Primorye Khabarovsk Zabaikalye Khakasia Krasnoyarsk Buryatia

Hard coal 1 underground

mine 3 open pits 1 washing plant Domestic/export

market

Hard coal 1 open pit 1 washing plant Domestic/export

market

Brown coal 3 open pits

(including Apsatsky coking coal open pit)

Domestic/export market

Murmansk Commercial Seaport

Vanino Bulk

Terminal

Maly Port

Production in 2015, mln tonnes

69.2

28.6

Open-pit Underground

We are highly competitive in the coal industry thanks to our well-developed assets, which include high-quality coal deposits and modern washing plants connected to key markets through efficient logistics.

2

1

2

Brown coal 1 underground

mine 1 open pit 1 processing

facility Domestic market

7 6 5 4 3

3

4 5

6

7

10.1

12.0

13.7

17.0

18.3

8.2

11.6

13.1

13.9

13.6

2.5

2.5

2.2

2.6

2.6

2011

2012

2013

2014

2015

Vanino Bulk Terminal Murmansk Commercial Seaport Maly port

Logistics

SUEK’s logistics and transportation system includes our own rail assets and ports, enabling us to deliver to domestic markets and to ship coal to multiple export markets in Atlantic and Asia-Pacific regions

Largest cargo shipper on the Russian Railways network

• SUEK accounts for 7.7% of total cargo turnover on Russian railways

• Around 45,000 railcars under management

• 9,160 innovative railcars with higher capacity up to 75 and 77 tonnes

• Long-term agreements with railway operators

Our own rail assets provide connection of our production units and ports to the mainstream rail infrastructure

• 746 km of dedicated rail network

• 26 coal loading stations

• 190 locomotives

Our ports provide guaranteed access to key export destinations both in Europe and Asia

• Vanino Bulk Terminal (100%-owned) shipped 18.3 Mt of coal in 2015. We plan to increase its capacity to 24 Mt a year by 2018

• Murmansk Commercial Seaport (SUEK holds 39.3% of shares) shipped 13.6 Mt of coal in 2015. We plan to increase its capacity to 16 Mt by 2017

• SUEK Group also has a 49.9% shareholding in Maly Port

Vessels under management

• Four ice-class vessels with a capacity of 17 Mt, providing reliable delivery from the Vanino Bulk Terminal to Asia-Pacific

8

Rail Ports

Shipment through own ports, mln tonnes

26.1

29.0

33.5

34.5

20.8

CAGR +28.7%

92.2

97.5

96.5

98.9

97.8

2011

2012

2013

2014

2015

2011

2012

2013

2014

2015

Own coal Purchased coal

CAGR +1.5% CAGR +8.6%

Key Operational Figures

Production Export sales

mln tonnes mln tonnes

Coal washing

Lost-Time Injury Frequency Rate mln tonnes

9

CAGR +14.6% CAGR -13.6%

33.7

38.8

42.4

45.6

46.9

2.02

1.92

1.50

1.57

1.23

2011

2012

2013

2014

2015

19.3

23.0

28.1

32.1

33.3

2011

2012

2013

2014

2015

We have been steadily increasing production of high-margin export-quality coal in line with our strategic focus on premium markets.

10

10

Ust-Luga Port

Murmansk Commercial Seaport

Vanino Bulk Terminal

Maly Port

Azov Port Vostochny Port

Railways

Shipping

We are well positioned to service both the Atlantic and Asia-Pacific markets. Our trading network in Russia, Poland, China, Japan, Taiwan, South Korea, Indonesia and the USA covers almost all our key markets, including premium markets, and enables us to build direct relationships with end-users

19.2 Mt1

41% of export

sales

Atlantic

54.2 Mt

Russia

27.7 Mt3 59% of export

sales

Asia-Pacific

United Kingdom Netherlands Germany Other Japan China South Korea Other

101.1 Mt*

SUEK’s total sales

Hard coal assets

Brown coal assets

Railways

Shipping

Our port facilities

Third-party ports

Sales offices

Sales Geography

Note: *All figures are given for FY2015

54% of total sales

993

3,023

Russia Export

25%

47%

31%

15%

7%

SGK

Other generatingcompanies

Communalutilities

Other

54%

46%

Russian market International market

SUEK Sales

Sales volume, 2015

• International sales account for 46% of SUEK sales volume and 75% of sales revenue

• SUEK is the largest supplier of thermal coal to the Russian market, with a share of around 40%

• Sales to SGK, a SUEK’s sister company and one of the largest energy generating companies in Russia, according to long-term contracts, provides us with secure market for low-quality coal, which has no export market

Sales revenue, 2015

11

mln tonnes

SUEK’s customers in Russia, 2015

Highlights

$m

46.9

52.4

75%

mln tonnes

23.9

3.4

7.6

19.3

Other power plants

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

-

200.0

400.0

600.0

800.0

1 000.0

1 200.0

1 400.0

1 600.0

1 800.0

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

20

28

20

29

20

30

20

31

20

32

20

33

20

34

20

35

mill

ion t

onnes

China India

JKT (Japan/Korea/Taiwan) SEA (Malaysia/Phil/Thai/Viet)

ROW % China

% India

Coal Market Review

12 Sources: Wood Mackenzie Report

Forecast

Coal market update and fundamentals

• By June 2016 coal prices rebounded from January and February lows by 8% in Asia and 18% in Europe

• h

• 1H production cuts by Chinese producers prompted an increase in domestic prices and favored arbitrage for imported coal

• h

• Increased Asia-Pacific demand combined with historical low freight rates attracted Colombian coal in 1H 2016, relieving the supply glut in the European and Mediterranean markets

• h

• Coal is a cyclical business, excess supply capacity will be absorbed by higher demand in the medium to long term

• h

• Higher grades coal will be required for more efficient and cleaner plants • h

• The key is to be positioned in the 1st or 2nd quartile of the cost curve during the downturn

Seaborned steam coal demand Key opportunities for SUEK

• SUEK has trading offices in premium markets, such as Japan and South Korea, enabling us to capture higher value for its products and supply coal to end users, eliminating ‘middle-man’ trading cost

• h

• SUEK’s high-quality coal and modern washing capacities enable us to satisfy demand from customers in Korea and India who have moved to higher calorific value products and away from sub-bituminous coals

• h

• In Europe steps have been taken to diversify tonnage from shrinking markets such as UK and Finland by diversifying into growth markets like Italy and Germany

Sources: Argus/McCloskey Index (API2) and globalCOAL (Newcastle index), SUEK estimate

International prices dynamics

Thermal coal, $ per tonne

30

60

90

Ja

n 1

4

Feb

14

Mar

14

Apr

14

May 1

4

Ju

n 1

4

Ju

l 14

Aug

14

Sep

14

Oct 14

No

v 1

4

De

c 1

4

Ja

n 1

5

Feb

15

Mar

15

Apr

15

May 1

5

Ju

n 1

5

Ju

l 15

Aug

15

Sep

15

Oct 15

No

v 1

5

De

c 1

5

Ja

n 1

6

Feb

16

Mar

16

Apr

16

May 1

6

Ju

n 1

6

Ju

l 16

20

16

F

20

17

F

API2 - NW Europe, CIF Rotterdam globalCOAL NEWC, FOB Newcastle

13

Our Finances

1 681

1 496

1 127

1 117

940

2011

2012

2013

2014

2015

0 200 400 600 800 1000

2011

2012

2013

2014

2015

Expansion capital expenditure Maintenance capital expenditure

Key Financial Figures

$m

14

Revenue Bank EBITDA1 margin

Bank EBITDA1 Capital expenditure

$m $m

355

562

938

797

496

5 683

5 635

5 381

5 053

4 132

2011

2012

2013

2014

2015

30%

27%

21%

22%

23%

2011

2012

2013

2014

2015

Note: 1 Bank EBITDA is calculated in accordance with SUEK’s loan agreements

As thermal coal prices decreased by over 50% over the past four years, SUEK focused on cost control and limited expansion CAPEX to projects at an advanced implementation stage, maintaining EBITDA margin at a solid level

Cash Cost Curve

Sources: Wood Mackenzie, SUEK estimates

15

SUEK assets within the global cash cost curve, FOB basis, 01\16

Most of SUEK’s assets are now situated in the first tercile of the global cost curve on an FOB basis due to relatively lower labour expenses Vs. other major exporters, own transshipment facilities ensuring low costs, lower rail and electricity costs due to Rouble depreciation

$ p

er

tonne

FOB Newcastle 1H 2016 average

51.0

0

20

40

60

80

100

120

140

160

0 50 100 150 200 250 300 350 400 450 500 550 600 650 700

SUEK USA South Africa Columbia Russia

Canada Australia Indonesia FOB Newcastle

mln tonnes

16

Key Investment Projects

• Vanino Bulk Terminal capacity

expansion to 24 Mt by 2018,

with focus on adjacent railway

infrastructure development

• Murmansk Commercial

Seaport expansion to 16 Mt

from 2017

Open pits Ports

Given challenging macroeconomic environment, SUEK has focused its capacity development programme on projects that are at an advanced implementation stage and enable the company to add production or shipment capacity on the most cost-efficient basis

Washing plants

• New open pit in progress in

Khabarovsk region, with a

capacity of 3 Mt from 2018

• Expansion of 4 mines with

high-quality coal in

Kemerovo, completed in 2015

Mines

• Chegdomyn washing plant

with a capacity of 6 Mt a year,

launched in 2013

• Taldinskaya-Zapadnaya 1

washing plant with the

capacity of 3 Mt a year,

commissioned in 2015 Capital expenditure, $m

0

100

200

300

400

500

600

700

800

900

2013 2014 2015

Maintenance capital expenditure

Expansion capital expenditure

496

797

355

17

Corporate Social Responsibility

Social Investments and Community Development

18

The overarching strategic goal of our social activity is the comprehensive development of the regions where we operate. For us, this means improving quality of life for our employees, their families and local people and communities

Our priorities Focus areas

• Revitalise local communities

• Expand and diversify our social programmes

• Promote local employment

• Expand the range of local social welfare services

• Introduce innovative technologies and approaches within the social sphere

• Environment

• Education

• Sport and healthy lifestyle

• Healthcare

• Improving and developing infrastructure

• Leisure, culture and unlocking creative potential

• Improving local self-government

• Developing local social and business activity, increasing personal fulfilment opportunities

• Affordable housing, services and utilities

$13m Spent on social and community projects in 2015

19

Environmental Protection

We aim to develop our business in a sustainable manner, ensuring our present activities enhance, rather than compromise, environmental conditions and quality of life for future generations. In all our programmes and investment decisions we consistently look to address environmental issues

$15m Spent on environmental projects

in 2015

Our priorities

• Further improve our environmental management system and production indicators

• Facilitate employee involvement in environmental risk mitigation activities

• Ensure transparency regarding environmental information

• Engage public and local authorities in discussing, making and implementing environmental decisions

Key areas for mitigation of our impact on the environment are:

• Air safety

• Water safety

• Energy efficiency

Methane utilisation

Total wastewater

million m3

million m3 of CH4

5.99

5.89

5.09

5.68

7.51

2011

2012

2013

2014

2015

168.3

158.3

110.1

103.3

106.2

2011

2012

2013

2014

2015

Personnel Development and Health&Safety

20

$46m Spent on health and safety programmes and initiatives in 2015

Our priorities in personnel development

• Efficiently employ the talents and skills of our staff

• Create good conditions for work and recreation

• Improve professional training system and offer people a wider range of career advancement opportunities

• Build and promote a corporate culture

Our people are one of our key assets. We constantly strive to create safe working conditions and offer all employees opportunities for professional growth and career advancement

Our priorities in H&S

• Reduce negative impacts of coal production on employee health and wellbeing

• Continually improve the mechanisms and methods for ensuring occupational and workplace safety

• Address atmospheric safety issues to prevent accidents and minimise the negative impact of coal dust on employees

• Ensure our production sites have the latest equipment and introducing modern safety and monitoring systems

• Ensure all employees are supplied with modern, high-quality work clothes and protective equipment, in line with our corporate standards

• Improve safety skills and capabilities through dedicated training provision and promotion of workplace discipline

• Implement special preventive medical programmes

1.50

1.57

1.23

2013

2014

2015

Lost time injury frequency rate (LTIFR)

$22m Total expenditure on collective arrangements in 2015

Contacts

For more information please contact

our Investor Relations Department

ir@suek.com

21

For more information please visit www.suek.com