Key Strategic Priorities (Vectors) of
the Company’s Development Strategy

Focus on First-Class Assets

Earnings > USD 1 billion
High EBITDA profitability > 40%
Long-term supply of inventory > 20 years
The Company’s profile will only have first-class assets by 2015-2016
Investment focus in the Zapolarny Branch—the Company’s main asset
Sustainable development of companies in difficult macroeconomic conditions, fulfilling all obligations to government agencies, the Company’s employees and shareholders
Ensuring sustainably high profitability throughout the entire macroeconomic cycle of asset development, including by concentrating managerial efforts and personnel resources, maximum utilisation of the existing infrastructure in combination with a deep knowledge of the geology of the asset affiliation region and economy of scale.

Profitable Increase in Commodity Output at the ZB Resource Base

Implementation of the Company’s flagship projects: Oktyabrsky, Taimyrsky, Komsomolsky, and the Skalisty mine on time and within the budget limits
Modernisation and debottlenecking of tight spots in the value chain, implementation of the Talnakh project
Increase in the number of jobs and new tax assignations to the budget of the base operations region—the Krasnoyarsk Territory
Ensuring long-term capacity for the next decades

Optimising the Business Model Considering the Possibility of Selling the First Saleable Product

Assessment of the world situation in terms of selling semi-finished products
Efficient increase in production and flexibility in choosing saleable products depending on the market situation
Promoting the Company’s sustainable development by ensuring that the main business support measures can respond efficiently to the changes in the world situation

Raising the Role of Copper and Platinum Group Metals in the Company’s Current Portfolio

Developing new fields with a high PGM content and increasing the ore extraction volumes at existing fields
Raising the indices for identifying and reducing losses in the existing technological chains
The Company is confident in the positive dynamics of the PGM market, and this will be kept in mind when making investment decisions
Based on the market situation, the Company is planning to increase PGM and copper production by increasing ore extraction volumes and raising the indices for identifying and reducing losses in the existing technological chains

Development of Geological Exploration as an Efficient Business segment

Developing the full potential of Taimyr, a little-explored region
Doubling investments in geological exploration work providing licensing legislation is improved
Creating new jobs and increasing tax assignations
Preserving and developing the Company’s competitive advantages—efficient geological exploration, many years of work experience on the Taimyr Peninsula, and highly professional personnel resources

Sustainable Development and Social Responsibility

Priorities on occupational and industrial safety
Environmental protection priority
Action plan:
- Introducing new technologies for smelting and refining nickel and copper
- Introducing new SO2 trapping technologies at the metallurgical plants in the Zapolarny Branch
- Concentrating smelting and refining capacities, while gradually taking outmoded equipment out of service
Achieving zero mortality, with life protection as the main priority
Intolerance of any unsafe actions
Maintaining the injury frequency coefficient with loss of work time at the level of world standards
Full compliance with the standards and requirements of Russian Federation legislation on environmental protection
Significant reduction in SO2 emissions at the Zapolarny Branch and at Kola MMC

Reorientating the Management System to «Return on Investment” and Corporate Culture to “Responsibility for Capital”

Building the Company’s philosophy around return on invested capital (ROIC)
Reorientating corporate culture to responsibility for capital, introduction of methods for evaluating and ranking investment projects (EBITDA at risk)
Forming a system of investment committees and subcommittees
Transforming the Company’s management and culture system will make it possible to return invested capital more efficiently in the medium term, which will have a positive effect on tax assignations to the budget of the Krasnoyarsk Territory

Organisational Development Priorities

De-bureaucratisation, ensuring transparency and competition of ideas and projects in the Company
Creating an adaptive organisation and drawing first-class managerial resources for realising market opportunities
Developing organisational skills for working with external partners to draw the best competencies.
Developing and strengthening the Company’s personnel resources
Creating an environment conducive to the self-realisation of talented and creative employees
Drawing those competencies from the labour market that the Company cannot cover independently