RUUKKI GROUP

Our 5 Year Growth Vision

Ruukki’s vision is to become a major player in the global chrome industry within five years. To achieve this, Ruukki is implementing a three phase growth strategy, which, it believes, will ultimately deliver this vision:

1. Grow its chrome ore resource base
2. Increase production through expansions at existing operations, new mine development and the construction of two new DC furnaces in South Africa
3. Secure power supply, either through ownership of a power plant or in partnership with industry participants, in order to control a key cost input.

FERROALLOYS

Ruukki’s FerroAlloys business is located in southern Africa and consists of the Stellite chrome mine, the Mogale Alloys processing plant and the Mecklenburg mine development project in South Africa and the Waylox mine development project in Zimbabwe.

The Stellite Mine – South Africa

The Stellite mine was acquired in late 2010, as part of the Chromex acquisition and will be the primary ore supply to Mogale Alloys, thereby integrating the FerroAlloys business. Excess lumpy chrome ore mined at Stellite is exported directly to China. The mine produces a 42% and 44% metallurgical grade chrome concentrate which is transported by road to Mogale and a 38% lumpy chrome ore, which is exported to China.

The Mogale Alloys – Processing Plant

Ruukki acquired Mogale in 2009, providing it with access to the bulk minerals processing sector in South Africa. The acquisition marked a strategic step forward for the Group by providing access to direct current (DC) furnace technology, which has been in operation at Mogale since 1983 and is considered to be a centre of excellence. DC furnace technology is approximately 20-30% more cost efficient than traditional furnace technology.

Mogale operates four furnaces; two submerged arc furnaces and two DC furnaces, with a total production capacity of 110,000 tonnes per annum. These furnaces are capable of producing four key products: silico manganese, plasma ferrochrome, charge ferrochrome and stainless steel alloy (chromium-iron-nickel alloy).

Mogale is classified as a manufacturing plant which only requires 15% BEE ownership.

The Mecklenburg Mine Development Project – South Africa

The Mecklenburg Mine Development Project is located on the Eastern Limb of the Bushveld Complex. The LG6 and LG6A chromite reefs, which outcrop at surface at Mecklenburg, comprise approximately 9Mt and 5.7Mt of chromite resources and reserves respectively.

The Waylox Mine Development Project – Zimbabwe

The Waylox Mine Development Project is located on the Great Dyke in Zimbabwe. It is a small, alluvial, high grade chrome deposit.

SPECIALITY ALLOYS

Ruukki’s Speciality Alloys business produces niche Low Carbon and Ultralow Carbon Ferrochrome products and comprises a vertically integrated business consisting of the Turkish mining operation, TMS and the German processing plant, EWW.

TMS – Turkey

TMS was acquired in 2008 from a private company Kermas and its operations consist of open pit and underground mining, as well as ore enrichment facilities equipped with primary and secondary crushing, milling and concentration tables. The production facilities are located in Kavak, in the Eskisehir province, and in Tavas, in the Denizli province. It also holds 27 licences, of which 12 are exploitation licences.

The annual production capacity is between 100,000 – 120,000 tonnes.

TMS produces two chrome ore types: special grade chromite concentrates and lumpy chrome ore.

The lumpy chrome ore is mainly supplied directly to stainless steel manufacturers in China and India. The chrome ore is also processed into special grade, highly concentrated chromite concentrate and delivered for further processing to the Group’s processing operations, EWW in Germany for the production of Low Carbon and Ultralow Carbon Ferrochrome.

EWW – Germany

Processing of the chromite concentrate produced by TMS is carried out at EWW in Eschweiler-Weisweiler, Germany, under a long term toll manufacturing agreement, which was entered into in 2008.

EWW is a highly specialised smelting operation, producing a range of specialist products, such as specialised Low Carbon and Ultralow Carbon Ferrochrome which are then sold internationally to customers in the automotive, aerospace and power generation, by RCS, the Group’s sales and marketing arm.

GROWTH PROJECTS

Ruukki’s vision is to become a major player in the global chrome industry within five years by growing its southern Africa asset base. To achieve this, Ruukki is implementing a three phase growth strategy, which it believes will ultimately deliver this vision.

Increase chrome ore production at existing operations and through new mine development

Ruukki believes it can substantially increase its chromite production in southern Africa over the next five years for relatively low capital expenditure through expanding production at Stellite and the development of Mecklenburg in South Africa.

Ruukki will seek to increase its chrome ore exports to China in the short term, until the two DC furnaces have been built, in order to generate additional cash flow.

Expand processing capacity through the construction of two new DC furnaces in South Africa

Ruukki is currently conducting feasibility studies on constructing two new 70MW DC furnaces in South Africa. Total installed production capacity will be 280,000tpa and the construction period is expected to take 24 months. Site selection is underway and Ruukki is in discussion with major Asian corporates to form a strategic partnership for financing and construction site.

Secure power supply

Electricity is one of the major cost inputs in the production and processing of chrome products and Ruukki believes it will have a long term competitive advantage over its South Africa peers if it can control its pricing exposure.

Ruukki is currently examining several options, including owning and constructing a power plant either in partnership with major Asian corporates or with other industry participants.

DR JELENA MANOJLOVIC Chairman, Dependent Non-Executive Director 

Ph.D. (Medicine), Clin. D. (Psychology), MA (Psychotherapy), Born 1950

Jelena Manojlovic has been a member of the Board since 11 July 2008, and Chairman of the Board since 16 June 2009. She is also a member of the Remuneration and Nomination Committees. An established university lecturer and organisational consultant, Dr Manojlovic has over 35 years’ experience in the human resources field and 20 years’ in management positions across a diverse range of organisations and universities, including the UK’s National Health Service and Kermas (a major shareholder in the Company), where she was Human Resources Director. Dr. Manojlovic is independent of the Company but through a controlled entity of her husband, Dr Danko Koncar, she is dependent on a major shareholder of the Company.

CHRIS POINTON Deputy Chairman, Independent Non-Executive Director 

BSc (Earth Sciences and Chemistry), PhD (Geology), Born 1948

Chris Pointon was appointed as a member of the Board at the Annual General Meeting on 21 April 2010. He is also Deputy Chairman of the Board, the Chairman of the Nomination Committee and a member of the Audit and Safety, Health and Sustainable Development Committees. He has 40 years of experience in the mining and minerals industry including exploration, development, operations and general management in Asia, Australia, South America, South Africa and Europe. He joined the Royal Dutch/Shell Group in 1970 in its Metals Division, subsequently Gencor, Billiton and BHP Billiton. From 1997 until his retirement in 2006 he was President of BHP Billiton’s Stainless Steel Materials Division.

THOMAS HOYER Chief Executive Officer, Dependent Executive Director 

M.Sc (Economics), Born 1974

Thomas Hoyer was a member of the Board during 7 October 2008 and 21 April 2010 and was re-elected at the Annual General Meeting on 11 May 2011. Hoyer joined Ruukki in 2009 as CEO of the now divested wood processing division. During his tenure he was responsible for turning around the division and for the successful sale of five subsidiaries, valued at over EUR 100 million. In October 2010 he was promoted to Group CFO and in May 2011 to Group Chief Executive Officer. Prior to joining Ruukki, he held a number of senior management positions in portfolio management, private equity and finance at Allianz, Bank am Bellevue, Invision and Aldata Solution. Hoyer is dependent of the Company based on his position as CEO.

DR DANKO KONCAR Enterprise Director, Dependent Executive Director 

Diploma (Engineering), M.Sc. (Engineering), Ph.D. (Engineering), Born 1942

Danko Koncar was a member of the Board during 31 March 2008 and 11 July 2008 and was re-elected at the Extraordinary General Meeting on 11 August 2010, with special responsibility for strategic direction and new business development. He has extensive experience in minerals processing and trading, including 20 years in ferrochrome processing with six years experience in the application of direct current technology to ferrochrome processing. He has served as Chairman of Samancor Chrome, General Director of RCS Ltd and is General Director of Kermas. He was Acting Managing Director of the Company between October 2010 and May 2011. Dr Koncar is dependent on the Company based on his position as Enteprise Director and dependent on a major shareholder of the Company through his controlled entity Kermas Ltd.

BARRY ROURKE Independent Non-Executive Director 

FCA, Born 1950

Barry Rourke was appointed as a member of the Board at the Annual General Meeting on 21 April 2010. He is also the Chairman of the Audit Committee and a member of the Remuneration Committee. He was an Audit Partner at PricewaterhouseCoopers for 17 years from 1984 to 2001, where he specialised in the Oil and Gas and Mining sectors. He currently holds a number of non-executive directorships and positions on the audit committees in other listed companies.

PHILIP BAUM Independent Non-Executive Director 

B.Com (Accountancy), LL.B (Law), Higher Diploma (Tax Law), Born 1954

Philip Baum was appointed as a member of the Board at the Annual General Meeting on 21 April 2010. He is also the Chairman of the Remuneration Committee and a member of the Nomination and Safety, Health and Sustainable Development Committees. He has had a 32 year career mostly with Anglo American Plc, with extensive international experience in Africa, Europe, North and South America and Australasia in mining, minerals and heavy industry. He retired from Anglo American Plc in 2009 as Chief Executive Officer of its Ferrous Metals Division and a member of its Executive Committee. Currently, he is also chairman of Nord Gold.

PAUL EVERARD Independent Non-Executive Director 

B.A. (Mechanical Sciences), M.A. (Mechanical Sciences), MBA, Born 1940

Paul Everard was appointed as a member of the Board at the Annual General Meeting on 21 April 2010. He is also the Chairman of the Safety, Health and Sustainable Development Committee and a member of the Audit Committee. He has had a career of over 40 years with natural resource companies involved in the extraction and processing of oil, metals and minerals including Shell, Billiton and BHP Billiton. In 1983 he was appointed Executive Director of Billiton responsible for the Aluminium Business. He retired from BHP Billiton as Deputy President Aluminium in 2005.

MARKKU KANKAALA Independent Non-Executive Director 

B.Sc. (Eng.), Born 1963

Markku Kankaala has been a member of the Board since 30 June 2003 and is a member of the Remuneration Committee. He was also the CEO of the Group from 2003 to 2004 and worked as a Branch Director in Ruukki Group Plc until 31 August 2006. Previously he worked for 10 years as an entrepreneur in the wood products industry and before that at different positions in Ahlstrom and Rautaruukki.

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