armz annaul report 2013 eng ver

INTEGRATED ANNUAL REPORT 2013

I N T E G R A T E D A N N U A L R E P O R TJSC ATOMREDMETZOLOTOFor 2013

INTEGRATED ANNUAL REPORTJSC ATOMREDMETZOLOTOFOR 2013

APPROVED by the Annual General Meeting of Shareholdersof JSC Atomredmetzoloto on June 30, 2014(Minutes No. 18)

The Report has been preliminarily approved by Decision No. 119 of the Board of Directors of JSC Atomredmetzoloto dated May 28, 2014

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Table of Contents

Information about the Report 4

2013 Key Performance Indicators 72013 Main Events 8Address by the Chairman of the Board of Directors 10Address by the Director General 11

Chapter 1. About the Company 131.1. General Information about JSC Atomredmetzoloto 14

1.1.1. General Information 141.1.2. Historical Background 141.1.3. Holding Organisation 161.1.4. The Company’s Role in Rosatom’s Production Cycle 17

1.2. Presence in Markets 171.3. Value Chain and Business Model 18

1.3.1. Value Chain 181.3.2. Business Model 18

Chapter 2. Strategy and Management System 212.1. Business Strategy 22

2.1.1. Corporate Mission and Values 222.1.2. Natural Uranium Market Overview and Outlook 232.1.3. Marketing and Sales Policy 252.1.4. Long-Term Strategy and Current Status of the Company 25

2.2. Management System 272.2.1. Corporate Governance 272.2.2. Report of the Board of Directors on Priority Lines of Business 322.2.3. Risk Management 322.2.4. Internal Monitoring System: Asset Protection 372.2.5. Procurement Management 38

2.3. Strategic Assets 392.3.1. CJSC RUSBURMASH Activities 402.3.2. JSC VNIPIpromtechnologii Activities 45

Miners on the way to their work site, JSC PIMCU

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Chapter 3. Effective Capital Management 513.1. The Company’s Capital 523.2. Financial Capital Management 52

3.2.1. Financial Management 523.2.2. Investment Activities 58

3.3. Production Capital Management 603.3.1. Raw Material Base Development 603.3.2. Uranium Production Methods 613.3.3. Uranium Production by JSC Atomredmetzoloto Russian Entities 633.3.4. Uranium Production by the Entities of Uranium One Inc. 653.3.5. New Projects 673.3.6. Other Entities 683.3.7. Non-Nuclear Projects 693.3.8. Rosatom Production System: Complying with Product Quality Requirements 71

3.4. Human Capital Management 743.4.1. Management System 743.4.2. KPI System 743.4.3. Human Capital Features 763.4.4. Remuneration System 793.4.5. Social Policy of the Company 803.4.6. Training and Development 823.4.7. Work with Students and Youth 843.4.8. Support for Veterans and Pensioners 843.4.9. Trade Unions and Collective Agreements 853.4.10. Occupational Health and Safety 86

3.5. Intellectual Capital Management 883.5.1. Innovative Activities 88

3.6. Social Capital Management 903.6.1. Stakeholder Engagement 903.6.2. Developing Regions of Operation 92

3.7. Natural Capital Management 973.7.1. Environmental Policy of the Company 973.7.2. Protection of Land and Biological Diversity 983.7.3. Protection of Water Resources 1003.7.4. Air Protection 1013.7.5. Waste Treatment 1023.7.6. Expenses Related to Environment Preservation 104

Chapter 4. Stakeholder Engagement in the Course of Report Preparation 1054.1. Discussions with Stakeholders in the Course of Report Preparation 1064.2. Taking into Account Stakeholder Suggestions 1074.3. Statement of Public Assurance 110

Appendices 113

Appendix 1. Matrix of Company’s Activities and Sustainable Development Data Significance 114Appendix 2. Table of Standard GRI Disclosures 115Appendix 3. Table of Disclosures as per the Reporting Standard of Rosatom State Corporation 121Appendix 4. Auditor’s Opinion on Financial Statements Accuracy 123Appendix 5. Report on Compliance with the Code of Corporate Conduct 124Appendix 6. Terms and Abbreviations 128Feedback Questionnaire 131Contact Information 133

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Information about the ReportInformation about the Report

The 2013 public Annual Report (hereinafter re-ferred to as the “Report”) is the sixth report by ARMZ Uranium Holding Co. (hereinafter referred to as “JSC Atomredmetzoloto”, “ARMZ Uranium Holding Co.”, the “Holding”, or the “Company”) summarising finan-cial, production, and non-financial results that give a general idea of the Company’s activities in sustainable development in particular.

Due to the diversified activities of CJSC RUSBUR-MASH and JSC VNIPIpromtechnologii, their activities are described in separate sections of this Annual Report (unlike in the previous one). In each section, stakeholders can find the companies’ key competen-cies and development prospects.

For more details see Section 2.3.1. CJSC RUSBUR-MASH Activities and 2.3.2. JSC VNIPIpromtechnologii Activities.

Report Scope

This Report deals with JSC Atomredmetzoloto’s main activities in Russia, Kazakhstan, Canada, and a number of other countries for the period from January 1, 2013 through December 31, 2013, the Company’s plans for 2014, and the Company’s long-term plans. The Report covers all major subsidiaries and associ-ates (hereinafter referred to as “S&A”) of the Holding.

Since Rosatom State Corporation’s uranium mining assets were restructured in 2013, JSC Atomredmetzolo-to will further focus on the development of Rosatom’s uranium assets in Russia. A new company, Uranium One Holding N.V., was established to manage the foreign uranium assets of Rosatom State Corporation during its initial nuclear fuel cycle stages. With this connection, the production and raw material base data for 2013 in this Report will be given in total for both Russian and foreign assets; however the development strategy and prospects will only cover assets in Russia. In later reports, the data will be consolidated within the scope of ARMZ Uranium Holding Co. management. Performance indicators dis-closed in the Report are based on the following:

■ production performance is based on the assets of JSC PIMCU, JSC Dalur, JSC Khiagda, Uranium One Inc., JSC EGMK-Project, JSC Gornoye UMC, JSC Olovskaya MCC (Mining and Chemical Company), JSC Lunnoye, CJSC RUSBURMASH, JSC VNIPIpromtechnologii, and ARMZ Service LLC;

■ environmental performance — JSC PIMCU, JSC Da-lur, and JSC Khiagda;

■ HR and occupational safety performance — JSC Atom-redmetzoloto, JSC PIMCU, JSC Dalur, JSC Khiagda, CJSC RUSBURMASH, and JSC VNIPIpromtechnologii;

■ financial indicators — based on consolidated state-ments in compliance with IAS.

Regulatory Requirements and Standards Used in the Report

The Report was drawn up according to Russian laws on open joint-stock company statements. Fi-nancials are based on consolidated statements pre-pared according to IAS requirements. You can find all IAS statements at the JSC Atomredmetzoloto website (www.armz.ru).

International standards related to public reports: ■ AA1000 Stakeholder Engagement Standards (Insti-

tute of Social and Ethical Accountability); ■ Sustainability Reporting Guidelines, Global Report-

ing Initiative (GRI rev. G4.0); and ■ International Integrated Reporting Framework

(IIRC, International <IR> Framework).

Rosatom State Corporation regulatory documents: ■ Public Reporting Policy of Rosatom State Atomic

Energy Corporation; ■ Public Annual Report Template for key (for the pur-

pose of public reporting) entities of Rosatom State Atomic Energy Corporation; and

■ Code of Conduct of Rosatom State Atomic Energy Corporation.

GRI Guidelines Application Option

The Report was prepared in accordance with the Core GRI G4.0 application option.

Report Preparation and Contents

Stage 1: Development of the Report concept, including: ■ analysis of stakeholder suggestions/comments

provided during the previous reporting campaign;

The Report was prepared in accordance with the Core GRI G4.0 application option

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■ updated methodological framework based on GRI, IIRC and Rosatom State Corporation requirements and other documents regulating the Report and

■ analysis of global best practices related to public reporting.

Stage 2: Selection of priority topics of the Report, including:

■ analysis of Company’s activities over 2013 and stakeholder recommendations received during the 2012 Report preparation;

■ list of significant topics; ■ checking the significance of the topics selected by

the Report Preparation and Audit Team; ■ discussing priority topics with stakeholders (through

questionnaires) and ■ the Company’s management approving the priority

topics.

Priority topics of the Report:

■ organisational changes within the Rosatom Mining Division and enhancing the efficiency of the Mining Division part located in Russia and

■ key production performance as of the end of the year.

Stage 3: Development of Report contents, taking into account:

■ JSC Atomredmetzoloto mission; ■ JSC Atomredmetzoloto strategy; ■ JSC Atomredmetzoloto current status; ■ Rosatom priorities; and ■ key stakeholders’ interests.

We also took account of requests received from stakeholders while preparing this annual report and previous ones.

Eduard Shcherbina, Face Miner at underground uranium mine No. 1, JSC PIMCU

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On March 26, 2014, two dialogues were held dedi-cated to:

■ JSC Atomredmetzoloto 2013 Basic Performance and Efficiency Enhancing Measures and

■ Organisational Changes within the Rosatom Mining Division and JSC Atomredmetzoloto Development.On May 20, 2014, the Report draft was publicly dis-

cussed in absentia. The public discussion involved stakeholder representatives.

For more details see 4.1. Discussions with Stake-holders in the Course of Report Preparation.

In the course of the discussions, 16 suggestions and recommendations were received from stakehold-ers, and 9 of them were implemented in this Report, while the rest are still being reviewed by the Holding’s management in the course of ongoing operations.

For more details, see 4.2. Taking into Account Stakeholder Suggestions.

■ auditor’s report on financial statements accuracy (for more details see Appendix 4. Auditor’s Opinion on Financial Statements Accuracy). The auditor of ARMZ Uranium Holding Co. is ZAO KPMG.The final revision of the Report was approved by the

Company’s Director General, the Board of Directors, and the General Meeting of Shareholders.

Disclaimer Regarding ForecastThe Report includes forecast statements regard-

ing production, financial, economic, and social per-formance in order to outline the Company’s future development. Implementation of our assumptions and intentions directly depends on the political, eco-nomic, social, and regulatory situation. For this rea-son, the actual Company’s performance may be dif-ferent from the forecast.

The Report includes some forecasted production, financial,

economic, and social values to give an idea about further development of the Company

Identifying the Significance of InformationIn compliance with the International Integrated

Reporting Framework and the GRI G4.0 Guidelines that require the disclosure of significant informa-tion only, while preparing the Report, the signifi-cance of the Company’s activities and sustainable development data were verified by questionnaires filled out by stakeholder representatives. The ques-tionnaires contained a list of topics that could be included in the Report, including topics selected in the GRI Guidelines, the Rosatom Public Report Template, and by the Company. Shareholders were to rate each topic on a 5-point scale and give their own suggestions regarding significant topics to be included in the Report.

For more details see Appendix 1. Matrix of Com-pany’s Activities and Sustainable Development Data Significance.

Stage 4: Verifying information: ■ statement of public assurance (for more details see

4.3. Statement of Public Assurance); ■ Review Commission’s opinion and

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2013 Key Performance IndicatorsTable. 1. Key Financial and Economic Performance of JSC Atomredmetzoloto

Operational performance 2011 2012 2013 2013 compared to 2012,%

For more details see

Uranium production, tons 7,091.20 7,572.20 8,220.50 +8,6 3.3.3. Uranium production by JSC Atomredmetzoloto Russian entities, 3.3.4. Uranium production by the Entities of Uranium One Inc.

Rating among the TOP-3 biggest uranium mining companies

III III III – 1.2. Presence in Markets

Uranium raw material base (Russian assets), thousand tons

515.80 550.50 541.90 -1.6 3.3.1. Raw Material Base Development

Uranium raw material base of Uranium One Inc., thou-sand tons

120.90 155.00 229.45 +48 3.3.4. Uranium production by the Entities of Uranium One Inc.

Personnel

Number of employees 10,668 11,850 11,645 -1,7 3.4.3. Human Capital Features

Personnel turnover, % 23.00 17.00 23.40 +37.35 3.4.3. Human Capital Features

Average monthly salary, RUB 39,085 48,475 55,019 +13.5 3.4.4. Remuneration System

Personnel engagement (divi-sion), %

45 50 55 +5 3.4.3. Human Capital Features

Occupational health and safety

Fatal injury frequency rate (FIFR)

0.02 0.01 0.02 +100 3.4.10. Occupational Health and Safety

Lost-time injury frequency rates (LTIFR)

2.23 0.39 0.55 +41 3.4.10. Occupational Health and Safety

Environmental protection

Environmental protection expenses, million RUB

192.90 263.20 393.38 +49.5 3.7.6. Expenses Related to Environment Preservation

Social and economic area

Taxes paid by ARMZ Uranium Holding Co. key entities to re-gional budgets, million RUB

1,055.15 1,037.01 1,804.09* +53.5 3.6.2.1. Economic Impact in Regions of Operation

* including the income tax paid by the consolidated group of taxpayers (hereinafter referred to as the “CGT”)

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2013 Main Events

January

■ Registration and licensing for the Khokhlovskoye field (JSC Dalur) with the Russian Federal Subsoil Resources Management Agency.

■ An ISO 9001 quality management system and an ISO 14001 environmental management system were introduced at JSC Dalur.

■ The joint project of JSC Atomredmetzoloto and JSC PIMCU won the open public competition Develop-ing a Complex Geotechnology-Based Processing Method for Low-Grade Uranium Ore that had been mounted by the Russian Ministry of Education and Science and the Company was granted the right to be subsidised to implement relevant complex high-end production projects.

February

■ The book “Uranium in Geology, Mining and Econ-omy” was published; it was written by Vadim Jivov (Chairman of the ARMZ Uranium Holding Co. Board of Directors and Uranium One Inc. President), Al-eksandr Boytsov (Uranium One Inc. Vice-President), and Mikhail Shumilin (Subsoil Use Adviser at JSC Atomredmetzoloto).

■ JSC Dalur launched a pilot plant for mining by-prod-uct rare earth element (REE) bulk concentrate from product solutions obtained in the course of uranium mining.

March

■ The Uranium One Inc. Extraordinary General Meet-ing of Shareholders, the Supreme Court of Ontario (Canada), Russian, US, and Australian regulators ap-proved the reverse split of 100% of ARMZ Uranium Holding Co. stock.

April

■ The automatic downtime and failure recording system was put into commercial operation at JSC PIMCU.

May

■ JSC PIMCU launched the Rosatom production pro-ject Sinking Operations Enhancement and achieved a sinking rate of 160 m in a single drive ahead of schedule.

■ Playgrounds and sports grounds for a kindergarten at Uksyanskoye settlement (Kurgan Region, Dal-matovo Area) were completed within the framework of the CSR policy and the scheme of developing re-gions of operation.

June

■ Rosatom uranium mining assets were restructured to ensure separate management of Russian and foreign uranium assets.

■ ARMZ Uranium Holding Co. took part in Interna-tional Forum ATOMEXPO 2013.

■ JSC Atomredmetzoloto took part in the Conference on Nuclear Power in the 21st Century mounted by IAEA and the Russian Government together with the OECD Nuclear Energy Agency and Rosatom State Corporation.

■ Uranium reserves at the Kolichikanskoye, Namaruskoye, Koretkondinskoye, Dybrynskoye, and Vershinnoye fields (Khiagda ore field) were ap-proved before the Russian State Commission on Mineral Reserves.

August ■ Fortum conducted a witness audit at JSC PIMCU. ■ JSC PIMCU’s 45th anniversary was celebrated. ■ An international certificate was obtained and an

information security management system build-ing was completed in compliance with ISO/IEC 27001:2005.

Delegation headed by V. Verkhovtsev (JSC Atom-redmetzoloto General Director), K. Ilkovsky (Trans-baikal Territory Governor) and S. Shurygin (JSC PIMCU General Director) during a National Miner’s Day celebration at JSC PIMCU

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■ The JSC Atomredmetzoloto 2012 integrated an-nual report was ranked TOP-10 in terms of qual-ity among the 100 biggest Russian and CIS com-panies by Expert RA Rating Agency. The report also won in the category “Best Annual Report Concept and Design” at the 10th FPS Annual Re-port Competition.

December

■ Diversifying its production, JSC PIMCU launched the project Coal Pit Optimisation and Logistics aimed at increasing brown coal production at the Urtuysky pit.

■ CJSC RUSBURMASH and JSC Kazgeology signed a collaboration agreement.

■ JSC PIMCU introduced a new complex process-ing technology for low-grade uranium ore.

■ JSC Atomredmetzoloto successfully completed the YaT-1-1 project to develop a geological data-base for the Streltsovskoye ore field (commercial operation performed by JSC PIMCU).

■ Uranium reserves at the Koretkondinskoye field (Khiagda ore field) were approved before the Buryatia Territory Commission on Mineral Re-serves.

September

■ NRNU MEPhI (National Research Nuclear University of Moscow Engineering Physics Institute), JSC VNIP-Ipromtechnologii (Design Prospecting and Scientific Research Institute of Industrial Technology), and JSC VNIIHT (Scientific Research Institute of Chemical Technology) signed a collaboration agreement.

■ Sports competitions for the personnel of ARMZ Uranium Holding Co. and its entities were held.

October

■ The Uranium One Inc. 100% reserve split transac-tion was closed.

■ Uranium reserves at the Vershinnoye field (Khiagda ore field) were approved before the Buryatia Terri-tory Commission on Mineral Reserves.

November

■ JSC PIMCU was rated as the most environmen-tally friendly company in the Transbaikal Territo-ry at the Russian Industrial and Environmental Forum RosPromEco.

■ Winners of Young Talents and the ECOLINE-2013 3rd Youth Educational Forum were awarded grants and other prizes.

Aleksandr Stremilov, Operator and Hydrometallurgy Specialist at the Product Solution Processing Area of the In Situ Leaching Shop. Process pipeline installation, JSC Khiagda

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ment based on our long-term interests in the Rus-sian nuclear industry. At the same time, Uranium One Inc. will preserve best global practices in corpo-rate governance (including the majority of the Board of Directors members being independent) and public reporting.

The other key event for the Mining Division was the decision made by the industry management due to the complicated situation on the global uranium market. Foreign assets were moved out of JSC Atom-redmetzoloto to serve as the basis for Uranium One Holding N.V., which is meant to facilitate Rosatom’s global growth at initial nuclear fuel cycle stages. The new company owns entities boasting nearly the lowest production costs; so, in spite of the current market con-ditions, it will effectively compete with global uranium leaders and completely provide a large-scale Rosatom presence enhancement programme with raw material.

Thus, starting from the second half of 2013, the key objective of JSC Atomredmetzoloto was to devel-op Russian assets employed in the first place to pro-vide for Rosatom’s needs in Russia.

In 2013, JSC Dalur and JSC Khiagda, which mine uranium with the effective and eco-friendly in situ leaching method, increased their production volume by 6% and 38%, accordingly. A lot was done to enhance the efficiency of PIMCU, the key Russian uranium company. Enhancement measures will continue to move forward with production diversification, financial recovery, and operational efficiency optimisation.

CJSC RUSBURMASH and JSC VNIPIpromtech-nologii, ARMZ geological survey, and a variety of en-gineering companies have been facing the challenge of increasing the amount of their orders outside the Russian nuclear industry. In 2013 they realised the first results in this work.

To achieve the set objectives, ARMZ Uranium Holding Co. should, as previously, follow sustaina-ble development principles, actively cooperate with stakeholders, and make managerial decisions while taking into account of stakeholder opinions.

I am sure that Rosatom’s work carried out in 2013 to ensure the long-term development of its Mining Division will lead to the most effective employment of the staff’s unique competencies, thus tapping into the full potential of JSC Atomredmetzoloto.

Chairman of the Board of Directors V. Jivov

Dear readers,

During 2013 Rosatom State Corporation continued to actively increase its presence on the global nucle-ar technology market. In worldwide terms, one of our biggest advantages is offering our partners the complete package of technology solutions for nucle-ar power production, which, apart from NPP con-struction, includes uranium enrichment, nuclear fuel production, building NPP equipment, NPP operation, and waste management.

This chain was built due to our access to natural uranium, which serves as the key fuel for the nuclear industry. Over several years, Rosatom State Corpo-ration closed a number of M&A transactions and de-veloped its projects in Russia based on JSC Atomred-metzoloto, which have resulted in the organisation of an ore mining division that since 2011 has been among the world’s TOP-3 biggest uranium mining companies. The key element of this strategy was the 100% reverse split of Uranium One Inc. (a Canadian public company).

In spite of the ongoing construction of NPPs in a number of countries, 2013 saw a decrease in prices on the global uranium market, triggered by the 2011 Fukushima Daiichi nuclear disaster. Spot quotations went down by more than 20% to USD 34.5 per pound. Over 2013 uranium assets were consolidated world-wide, with many uranium mining companies giving up new projects.

Being a strategic investor and striving to develop its Mining Division, in 2013 Rosatom State Corpora-tion acquired 100% of Uranium One Inc. We believe that private ownership is better for effective develop-

Address by the Chairman of the Board of Directors

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Address by the Director General

Dear shareholders, partners and colleagues,

The year 2013 brought two major events for JSC Atomredmetzoloto. First, in August 2013 the Russian flagship uranium company JSC PIMCU (Priargunsky Industrial Mining and Chemical Union) celebrated its 45th anniversary. Second, in September 2013, uranium market quotations went below USD 90 (RUB 2,800) per kilo, i.e. to the level of 8 years ago. This caused 30% of all the operating uranium mines all over the world (in-cluding JSC PIMCU) to become unprofitable.

The situation on the natural uranium market shows that in the reporting year, ARMZ Uranium Holding Co. faced a big challenge.

developed and will be implemented by 2016. With this connection, we increased production of coal and sul-phuric acid at the Urtuysky pit and the sulphuric acid plant included in the Holding.

Further innovations were introduced, including the unique and cost-beneficial 3D hydrogeological mod-elling system for uranium fields employing downhole in situ leaching.

Business diversification was also implemented. CJSC RUSBURMASH revenue outside the Holding activities increased by more than tenfold. JSC VNIPIpromtech-nologii achieved a stronger position on the radioactive waste management market (also outside Russia) due to its participation in EAEC and EU projects. The First Ore Mining Company started to develop the Pavlovskoye field on Novaya Zemlya, one of the world’s biggest lead and zinc deposits. First investment agreements were signed for the development of new business activities based on JSC PIMCU and JSC Khiagda.

There is still a lot to be done in 2014. We see our key objective as decreasing production costs and en-hancing our competitive edge within the Russian ura-nium mining industry. I would like to point out that the challenges we face can only be met if we balance the interests of all stakeholders. In spite of the difficult sit-uation with the uranium market, we are determined to practice social conscience in business restructuring, environmental protection, and industrial safety.

We believe that the 2013 Annual Report gives a well-balanced and reasonable view of JSC Atomred-metzoloto’s strategic initiatives, social and economic impact on regions of operation and environmental con-cerns, and includes both challenges and achievements.

The labour and enthusiasm of thousands of Holding employees back up every page of this Report and every practical example provided within it. These are techni-cians and underground surveyors from Transbaikal, engineers and designers from Moscow, field workers from Novaya Zemlya, and many others. They are true professionals and patriots. I am sure that with their help ARMZ Uranium Holding Co. can address any challenge.

Director General V. Verkhovtsev

In spite of the difficult situation with the uranium market, we

are determined to practice social conscience in business restructuring, environmental

protection, and industrial safety

A lot of work was done. Heavy cost cutting allowed all the entities to fulfil 100% of their production plans. JSC Khiagda managed to start operating a pilot plant without losses. JSC Dalur achieved self-financing of its operational and investment activities. The pro-gramme for JSC PIMCU’s profitable operation was

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1.1. General Information about JSC Atomredmetzoloto

1.2. Presence in Markets

1.3. Value Chain and Business Model

ABOUT THE COMPANY


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1.1. General Information about JSC Atomredmetzoloto

1.1.1. General Information

Main ActivitiesARMZ Uranium Holding Co. is the mining division

of Rosatom and one of the leaders in the global ura-nium market. The company engages in a number of projects related and unrelated to uranium that are currently at various implementation stages, from ge-ological exploration to active commercial operation. JSC Atomredmetzoloto boasts unique competencies in the uranium mining sector; it has long-term and wide experience in developing fields with various ge-oclimatic conditions.

Regions of OperationUpon restructuring in 2013, JSC Atomredmetzoloto

is now managing Russian uranium mining assets. The biggest ARMZ Uranium Holding Co. entity is JSC PIM-CU (Priargunsky Industrial Mining and Chemical Un-ion) located in the Transbaikal Territory. JSC Khiagda is registered in Buryatia. JSC Dalur, the first Russian company to mine uranium with in situ leaching, oper-ates in the Kurgan Region.

Key Laws and Regulations Applicable to the Company’s Activities

The Company is regulated by its Charter, internal documents, and the following regulatory acts:

■ Federal Law No. 208-ФЗ On Joint Stock Companies dated December 26, 1995;

■ Federal Law No. 129-ФЗ On State Registration of Legal Entities and Individual Entrepreneurs dated August 8, 2001;

■ Federal Law No. 13-ФЗ On Management and Dis-posal of Property and Shares of Companies Related to Nuclear Power and on Amending Certain Stat-utes of the Russian Federation dated February 5, 2007;

■ Federal Law No. 135-ФЗ On Protection of Competi-tion dated July 26, 2006;

■ Federal Law No. 39-ФЗ On Securities Market dated April 22, 1996; and

■ Russian FFMS Decree No. 11-46/пз-н On Approv-ing the Regulations on Disclosure by Equity Securi-ty Issuers dated October 4, 2001.

Membership JSC Atomredmetzoloto is a member of the World

Nuclear Association and the IAEA.

JSC Atomredmetzoloto boasts unique competencies in the

uranium mining sector; it has long-term and wide experience in developing

fields with various geoclimatic conditions

External Charters, Principles and Other InitiativesThe Holding exists in accordance with the Russian

Business Social Charter.

1.1.2. Historical Background

State Concern Atomredmetzoloto was founded in 1991 to succeed the former First Chief Directorate of the USSR Ministry of Medium Machine Building and later operated within the structure of the Minis-try for Atomic Energy of the Russian Federation. The

Concern was an industrial complex of mining and processing enterprises located in six counties within the Commonwealth of Independent States — Russia, Ukraine, Uzbekistan, Kazakhstan, Tajikistan, and Kyrgyzstan. State Concern Atomredmetzoloto was involved in the exploring, mining, and processing of uranium, gold, and rare and rare earth element ores. It was also engaged in the design of mines, ore processing facilities, and machine engineering plants. In 1995, State Concern Atomredmetzoloto was reorganized to become a joint stock company of the open type.

By mid-2008, within the framework of the nuclear industry restructuring, JSC Atomredmetzoloto re-ceived control over the following domestic uranium mining assets: JSC PIMCU, JSC Dalur, and JSC Kh-iagda, which had been formerly owned by JSC TVEL, a producer of fuel for nuclear power plants. Fur-thermore, TENEX (JSC Techsnabexport), Russia’s exporter of enrichment services and enriched ura-nium, transferred to ARMZ its stakes in uranium ex-ploration and mining joint ventures outside of Rus-sia. Along with that, JSC Atomredmetzoloto received from TENEX licenses for the right to use the subsoil


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of the reserve uranium deposits, including those of the world’s largest Elkon uranium ore province.

After completion of all re-organisation activities, JSC Atomredmetzoloto assumed full authority over procurement for the domestic and international feedstock requirements of Russia’s nuclear indus-try and became one of the global leaders in uranium production.

In 2008, with a view of rendering the company’s name compliant with its business objectives, as de-termined by Rosatom State Corporation, the man-agement of JSC Atomredmetzoloto made a decision to rebrand the company, changing its name to ARMZ Uranium Holding Co.

In 2009, JSC Atomredmetzoloto purchased Effec-tive Energy N.V., thereby consolidating the Russian stake in Kazakhstan-based uranium mining joint ventures. As a result of an asset swap deal, JSC Atomredmetzoloto acquired a 19.95% stake in the Canadian uranium mining company Uranium One Inc. Representatives of ARMZ Uranium Holding Co.

joined the Board of Directors of Uranium One Inc. and took up senior positions in the company’s man-agement.

In 2010, JSC Atomredmetzoloto consolidated a controlling stake in Uranium One Inc.

In 2011, JSC Atomredmetzoloto acquired 100% of the Australian publicly traded company Mantra Re-sources Limited, which owns the Mkuju River pro-ject in Tanzania.

In 2012, ARMZ Uranium Holding Co. purchased 99.5% of The First Ore Mining Company’s shares.

In 2013, taking into consideration natural uranium market trends, ARMZ Uranium Holding Co. consolidat-ed a controlling stake in Uranium One Inc. Under the agreement, all Uranium One Inc. ordinary shares were purchased that at that time were not possessed by JSC Atomredmetzoloto and its affiliated companies.

Rosatom State Corporation authorised Uranium One Holding N.V. to manage its foreign assets. Since December 2013, JSC Atomredmetzoloto has been controlling all Russian uranium mining assets.

Aleksey Grigoryev, Boring Machine Operator at the Tool Area of the Machine Assembly Shop, Repair and Engineering Works, JSC PIMCU


16

1.1.3. Holding Organisation

Figure 1. Diagram of JSC Atomredmetzoloto S&A as of December 31, 2013

JSC Atomredmetzoloto

JSC PIMCU

89,85%

JSC Dalur

98,89%

JSC Khiagda

100%

CJSC RUSBUR-MASH

100%

JSC VNIP-IPROMTECH-NOLOGII

100%

JSC Lunnoye

50,03%

JSC Olovskaya MCC

100%

JSC Gornoye UMC

100%

Itmanovo Agroindustrial Company LLC

100%

United Uranium Companies LLC

50%

JSC South Yakutia Complex Development

25,1%

JSC Uranium Mining Company

100%

Mantra Re-sources Pty Ltd. (Australia)

86,09%

Uranium One Holding N.V. (Netherlands)

43%

RUNEX URA-NIUM Pty Ltd. (Namibia)

50%

Armenian-Rus-sian Mining Company CJSC (Armenia)50%

JSC EGMK- Project

100%

The First One Mining Company

99,6%

ARMZ Namibia Pty (Namibia)

100%

Vostok Power Resources (Great Britain)

100%


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1.1.4. The Company’s Role in Rosatom’s Production Cycle

ARMZ Uranium Holding Co. controls and unites all Russian uranium mining assets. Along with Uranium One Holding N.V. controlling uranium assets abroad, it is included in the Rosatom Mining Division and ensures natural uranium supplies.

1.2. Presence in MarketsARMZ Uranium Holding Co. mainly operates on

the natural uranium market. In 2013, Rosatom State Corporation, controlling JSC Atomredmetzoloto and Uranium One Holding N.V., ranked second among the world’s biggest companies in terms of its con-trolled raw materials base and third in terms of ura-nium production.

Rosatom’s position in the uranium market is se-cured through guaranteed demand from global nucle-ar companies, a geographically diversified production and raw material base, effective mining costs, and the implementation of sustainable development meas-ures for operating entities and future projects.

JSC Atomredmetzoloto’s development is also stim-ulated by secondary businesses (coal mining, thermal and electrical power generation, sulphuric acid produc-tion, building mining equipment at JSC PIMCU, render-ing drilling, design, survey, and engineering services, etc.). The above services and products are used by JSC Atomredmetzoloto’s production entities, other compa-nies within Rosatom State Corporation, and independ-ent Russian and foreign companies.

For more details see 2.1.2. Natural Uranium Mar-ket Overview and Outlook and 3.3. Production Capi-tal Management.

Figure 2. JSC Atomredmetzoloto’s Role in Rosatom Production Cycle

01

02

03

10 08

09 07

0605

11

ARMZU1H

ARZM Rosatom

04

01 – geological exploration, 02 – mining, 03 – ore processing,

04 – conversion, 05 – enrichment, 06 – fuel production, 07 – NPP, 08 – spent nuclear fuel storage, 09 – spent nuclear fuel treatment, 10 – spent nuclear fuel disposal, 11 – МОХ fuel production


18

1.3.1. Value Chain

The ARMZ Uranium Holding Co. value chain is based on the production cycle model including a range of interconnected processes.

ARMZ Uranium Holding Co. has the whole array of competencies to implement all value chain stages, from geological exploration and design to reclamation and decommissioning. These competencies are used to assess and implement business diversification pro-jects.

1.3.2. Business Model

The business model is a short-, medium-, and long-term value delivery system that is also used to achieve strategic goals.

The Holding’s business model is based on its mis-sion and long-term strategy.

The business model includes: ■ available capital (for more details see Chapter 3. Ef-

fective Capital Management); ■ a management system employed for the most ef-

fective use of available capital (for more details see 2.2. Management System);

■ value delivery based on the transformation of avail-able capital (Holding’s main activity); and

■ value delivery results (the Holding’s main products).The Holding’s business model is specifically fo-

cused on the environment since ■ a part of its resources come from nature and a big

part of its results also relate to it (e.g. social and natural capital); and

■ the environment is the source of the Holding’s main opportunities and risks (for more details see 2.1.1. Corporate Mission and Values and 2.2.3. Risk Man-agement).

Figure 3. ARMZ Uranium Holding Co. Value Chain

ARMZ Uranium Holding Co. has the whole array

of competencies to implement all value chain stages,

from geological exploration and design to reclamation

and decommissioning

ExplorationObtaining subsoil

use rightsGeological exploration

R&D and innovations

Pre-design engineering

Design of facilities

Construction of facilities

Operation of facilities: uranium mining and processing

Reclamation and decommissioning

1.3. Value Chain and Business Model


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The business model deals with transforming six types of capital, with changes described in the rele-vant parts of the Report:

■ financial capital (for more details see 3.2. Financial Capital Management);

■ production capital (for more details see 3.3. Pro-duction Capital Management);

■ human capital (for more details see 3.4. Human Capital Management);

■ intellectual capital (for more details see 3.5. Intel-lectual Capital Management);

■ social capital (for more details see 3.6. Social Capi-tal Management); and

■ natural capital (for more details see 3.7. Natural Capital Management).

Effective management of the above types of capital is realised through the management system (for more details see 2.2. Management System).

Sustainability of the business model is ensured through:

■ integration into the Rosatom value chain (the big-gest vertically integrated company in the global nu-clear sector);

■ employment of experience and technologies of the highest Russian and international levels at all value delivery stages;

■ effective implementation of corporate projects (enhanc-ing efficiency, Rosatom Production System, etc.); and

■ a complex and systematic approach to risk man-agement.

Nikolay Poponin, General Director, verifies compli-ance with product solution processing procedures at JSC Dalur


20

Figure 4. JSC Atomredmetzoloto Business Model

Capitals Management system Value chain Capital changes

Exploration

Obtaining subsoil

use rights

Geological

exploration

R&D and innovations

Pre-design engineering

Design of

facilities

Construction of

facilities

Operation of facilities:

uranium mining and

processing

Reclamation and

decommissioning

Main Activities

Financial

capital

management

Financial

capital

Production

capital

management

Production

capital

Human

capital

management

Human

capital

Intellectual

capital

management

Intellectual

capital

COMPANY

Social and

social &

economic

capital

management

Social

capital

Natural

capital

management

Natural

capital

STA

KE

HO

LD

ER

S

Risks and opportunities

SOCIETY

ENVIRONMENT

COMPANY

Financial

capital

Production

capital

Human

capital

Intellectual

capital

Natural

capital

Social capital

Risks and opportunities

Strategy Strategic objectives

Mission

Uranium

concentrate

Brown coal

(thermal coal)

Main Products

Electric power

Thermal power

Sulphuric acid

Geological survey

support and drilling

services

(RUSBURMASH)

Design and engineering

services

(VNIPIPROMTECHNOLOGII)

Mining

equipmentS

TAK

EH

OL

DE

RS


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STRATEGY AND MANAGEMENT SYSTEM2.1. Business Strategy

2.2. Management System

2.3. Strategic Assets


22

2.1. Business Strategy

2.1.1. Corporate Mission and Values

ARMZ Uranium Holding Co.’s mission is to provide raw materials for the development of cutting-edge technologies.

Its strategy is to maximise business value for share-holders, while at the same time:

■ ensuring highly efficient uranium production; and ■ increasing business volume and diversification by

developing new mining and smelting business lines.Being the only Russian mining company totally

controlled by the state, JSC Atomredmetzoloto in-tends to use its public-private partnership oppor-

tunities for project developmentin the best ways possible. The Company’s advantages are its high-ly qualified team with diverse mining experience under various natural and climatic conditions, and its full range of competencies to manage the com-plete exploration, operation, and waste manage-ment cycle (also for radioactive waste).

For more details see 1.3. Value Chain and Busi-ness Model.

Key Corporate ValuesARMZ Uranium Holding Co. carries out its activities

on the basis of its corporate values.

Corporate Values Principles of Conduct

Security ■ Ensure industrial and labour safety for the employees and inhabitants in the regions of operation;

■ maintain balance of local eco-systems and comply with work method statements for natural uranium extraction and processing, including nuclear and radiation safety norms; and

■ comply with environmental norms and make production as eco-friendly as possible.

Caring about our customers ■ Provide Russian and foreign consumers with products complying with Russian and international quality standards under long-term agree-ments and on market conditions.

Business initiative ■ Best use of opportunities in regions of operation to:

■ successfully employ the ARMZ Uranium Holding Co. potential; ■ ensure sustainable development, also by using Russian and foreign

state-of-the-art methods in geological exploration, production, and corporate governance; and

■ look for new development prospects in the uranium industry.

■ Implement business diversification projects to ensure increasing vol-umes and better sustainability.

Table 2. ARMZ Uranium Holding Co. Corporate Values and Code of Conduct


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2.1.2. Natural Uranium Market Overview and Outlook

Overview of Global Natural Uranium Market In 2013, 59.1 thousand tons of uranium were mined

worldwide, which demonstrates a 3% year-on-year increase.

In 2013, nine of the biggest countries leading in ura-nium production (producing over 1,000 tons per year)

accounted for 93% of all produced uranium. Kazakhstan with 38% is still the first among uranium suppliers. In Canada, which ranks number two (15%), the production volume demonstrated a slight increase, and in Australia (No. 3 with 11%) a decrease was observed.

The biggest increase in uranium production (over 15%) was shown by the USA (due to production in-crease at existing plants and the launch of two new plants).

Figure 5. Uranium Extraction by Countries, 2011–2013, thousand tons

Sources: JSC Atomredmetzoloto assessment based on press releases and corporate reports, US EIA.

The total amount of uranium produced by nine ma-jor companies (over 2,000 tons) comprised about 82% of the global output.

The biggest uranium company is still JSC NAC Kazatomprom (National Atomic Company Kazatom-prom), which extracted 12.6 thousand tons of urani-um. Cameco is in second place, with about 9.1 thou-sand tons. Rosatom State Corporation controlling

JSC Atomredmetzoloto and Uranium One Inc. (shown separately in Figure 6) ranked third with more than 8.2 thousand tons.

In 2013, some growth in uranium production was demonstrated by Uranium One (by more than 8%), Cameco (nearly 8%), and JSC NAC Kazatomprom (6%). The biggest decline in production was shown by Rio Tinto (18%) and AREVA (4%).

Figure 6. Uranium Production by Major Companies, thousand tons

Kazakhstan Canada Australia Niger Namibia Russia Uzbekistan USA Malawi

25

20

15

10

5

0thou

sand

tons

U

Sources: Press releases and corporate reports. Data for Navoi Mining and Metallurgical Combinat (NMMC) assessed by JSC Atomred-

metzoloto. Extraction volume calculated as a proportion to the ownership ratio.

NAC Kaz-

atomprom

Cameco AREVA Uranium One BHP Billiton Paladin

Energy

ARMZ Rio Tinto Navoi NMMC

14

12

10

8

6

4

2

0

тыс.

тон

н U

2011 2012 2013

2011 2012 2013


24

A number of new uranium mills were put into op-eration in 2013:

■ in May 2013 Cameco (Canada) started downhole in situ leaching (hereinafter referred to as “DISL”) uranium production in North Butte (Wyoming, USA). With the full capacity reached, they will mine 269 tons of uranium annually; and

■ in August 2013 Ur-Energy Inc. (USA) put its Lost Creek facility in operation (Wyoming, USA). At full capacity DISL uranium production, they will reach 385 tons per year. Geological exploration companies carried on their

review of projects that may be on demand in the future. Geological exploration is actively being per-formed in Canada, the USA, Africa, South America, and Australia. Greenland can be recognized a pro-spective region again since in October 2013 the ban on radioactive extraction was lifted.

Mergers and Acquisitions in the Uranium IndustryThe total M&A transactions volume in the industry

in 2013 was USD 1.5 billion, which is approximately at the level of 2011 and more than three times lower than in 2012 (when it exceeded USD 5 billion). This was caused by unfavourable market trends.

In 2013 the only big transaction was the consolida-tion of 100% of Uranium One Inc. shares by Rosatom State Corporation (about USD 1.3 billion). Other major players (including Chinese companies that had made some major acquisitions in previous years) were not active in the M&A transactions. Most transactions were closed by junior companies to consolidate po-tentially efficient assets and raise funds.

Developments Outside the Reporting Period Over 2013 Paladin Energy Ltd. (Australia) negoti-

ated on strategic investors acquiring a stake in the Langer Heinrich (Namibia) capital. In January 2014 Paladin Energy announced the sale of a 25% stake to China Uranium Corporation Ltd. (controlled by CNNC, China) for USD 190 million.

Development of Current and Future ProjectsDue to unclear prospects of the nuclear power in-

dustry in 2013 and a price fall on the uranium market, in 2013 and early 2014, major companies reconsid-ered their plans for current and future projects:

■ in August 2013, Navoi NMMC suspended construc-tion of three new mining facilities in Uzbekistan (Meylisay, Aulbek, and North Mayzak) for unprof-itability reasons. The construction of Aulbek was continued in October, and nothing is known about whether construction of the two other facilities will be resumed;

■ in September 2013 Cameco Corp. postponed the commissioning of the Cigar Lake mine (Canada) for six months due to additional works and the unavailability of the McClean Lake processing fa-cility. In March 2014 mining started at Cigar Lake. In 2014 it is planned to produce 700 to 1,000 tons of uranium, and full capacity (6,924 tons per year) will supposedly be achieved by 2019. At the same time the company announced that it was going to suspend two projects in the USA (Gas Hills and Reynolds Ranch);

■ in autumn 2013, JSC NAC Kazatomprom an-nounced it was going to cut its uranium mining plans in Kazakhstan. The company did not mention whether production at Central Moinkum had start-ed (previously it had been planned to mine the first 50 tons of uranium by the end of 2013). According to its assessment, uranium production volume in 2014 would be the same as in 2013;

■ in November 2013 it was decided to temporarily shut down Honeymoon operated by Uranium One Inc. due to problems with reaching design capacity and high operational costs;

■ in December 2013–January 2014 Talvivaara Min-ing Company (Finland), which had planned to start ancillary uranium mining at Sotkamo, Finland, in 2014 (together with Cameco Corp.), announced that its financial position had worsened signifi-cantly due to the fall of nickel prices (their main product) so they had to downsize by 50%. The pro-ject was suspended;

■ in February 2014 Paladin Energy (Australia) decid-ed to temporarily shut down its Kayelekera mine in Malawi. The reason was low uranium prices and lack of funds for further mine optimisation and coverage of losses from its operation;

■ in April 2014 General Atomics launched uranium production at Four Mile, Australia (operated by Quasar Resources). Uranium will be mined with the DISL method and processed at Beverley, an-other facility from the same company. Four Mile’s full annual capacity will be 769 tons of uranium;

■ Uranerz Energy started to operate Nichols Ranch (Wyoming, USA). During the first several years the facility will produce 230–310 tons of uranium, and its full capacity is 700 tons per year;

■ Peninsula Energy is planning to launch mining un-der its Lance Project (Wyoming, USA) in the sec-ond half of 2014. Once at full capacity, it will pro-duce 577 tons of uranium annually; and

■ in 2013 infrastructure construction and personnel recruiting were started and orders for basic equip-ment were placed under the Husab Project at the Rossing South field, Namibia, owned by CGNPC


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(China). Preparation for mining operations was carried out in Q1 2014. The first consignment of finished product is planned to be ready in Q4 2015 and full capacity (5,770 tons of uranium per year) will be reached in 2018.

2014 Outlook In 2014 an increase in uranium production in Cana-

da, the USA, and other countries is expected to com-pensate for the anticipated production drop in Aus-tralia and Malawi.

compared to the results of the previous audit con-ducted 5 years earlier.

The Holding labels its products according to Fed-eral Law No. 170-ФЗ on Nuclear Energy Use dated November 21, 1995. JSC Atomredmetzoloto entities are licensed for the safe handling of nuclear materi-als by Rostekhnadzor.

In 2013 a Rosatom committee verified compliance with nuclear material control requirements at JSC PIMCU. The results were satisfying.

2.1.4. Long-Term Strategy and Current Status of the Company

The strategic objective is realised with an account of tasks set by the state and Rosatom’s corporate aims. In 2013 shareholders decided to restructure ARMZ Uranium Holding Co. by separating Russian and foreign assets. International projects are man-aged by Uranium One Holding N.V. JSC Atomred-metzoloto is focused on more efficient uranium pro-duction at Russian fields to cover the needs of the industry in the first place.

The Holding’s strategy is based on a realistic as-sessment of the benefits and restrictions in the Rus-sian uranium industry depending on the raw material quality, available competencies of managing the en-tire deposit life cycle, and potential funds to be raised for development.

National uranium production has strategic signifi-cance and covers about half of Rosatom’s demand for raw materials. At the same time, the entities engaged in DISL uranium production (JSC Dalur and JSC Kh-iagda) will have a global competitive edge once they have reached full production capacity, regardless of economic trends. As for the biggest national uranium company, JSC PIMCU, it demonstrates high produc-tion costs due to its mining of uranium at low concen-tration fields and it is therefore prone to market risk.

The 2013 global uranium price drop left two-thirds of Russian uranium production outside the mar-ket. In the short-term prospective, JSC Atomred-metzoloto will focus on cost and production capacity management in order to minimise its losses. It will increase operational efficiency and take care of fi-nancial recovery and the restructuring of JSC PIMCU. Investment projects will be adjusted to ensure rapid ISL production growth.

The medium-term key task is to ensure the prof-itability of all uranium mining companies and the Holding in general by 2016.

Long-term financial stability will be achieved through business diversification and increased pro-

2.1.3. Marketing and Sales Policy

According to the Rosatom decision on Holding re-structuring, the marketing and sales of uranium pro-duced in Russia will now be undertaken by JSC Atomred-metzoloto, and that of uranium produced abroad — by Uranium One Holding N.V. (U1H). In 2014, joint venture United Uranium Companies LLC was established and served as the single point of contact for consumers to ensure effective sales and maintain the existing sales infrastructure in compliance with the needs of JSC Atomredmetzoloto and U1H customers.

In 2013 all contractual obligations to supply custom-ers were discharged in full. JSC Atomredmetzoloto en-tered into a number of medium-term agreements with current and new counterparties.

Quality ManagementIn 2013 JSC Atomredmetzoloto and its subsidiar-

ies JSC PIMCU and JSC Khiagda started certification of the quality management system to ISO 9001:2008 as well as certification of the environmental manage-ment system to ISO 14001:2004.

Vattenfall Nuclear Fuel AB (Sweden) performed an external audit of the quality and environmental management system of JSC Dalur. In 2013 Fortum (Finland) performed a witness audit at JSC PIMCU, pointing out significant improvement measures as

In 2014 an increase in uranium production in Canada, the USA,

and other countries is expected to compensate for

the anticipated production drop in Australia and Malawi


26

ceeds from non-uranium projects. In 2013 the Hold-ing developed a concept for establishing new mining and smelting and adjacent operations involving ex-ternal investors on industrial partnership terms. The concept will be implemented in two stages:

■ Stage 1 (2014–2016): moderate diversification — projects on enhanced efficiency and the processing depth of the Compa-ny’s own raw materials and mining stockpiles with the use of existing competencies and infrastructure;

■ Stage 2 (2016–2020): large-scale development of new business areas — major projects related to the Transbaikal mining and smelting cluster and high-margin projects outside the uranium sites currently being operated.The core idea of the concept is to establish a JSC

PIMCU based industrial park with high production, and technical and workforce potential. Successful im-plementation of these projects, involving investment partners, will help diversify the business and provide employment in the region.

Figure 7. Strategic Project Roadmap

ISL asset development (JSC Khiagda and JSC Dalur)

JSC PIMCU optimisation

Establish a mining and smelting cluster in the Transbaikal Territory (Bystryan-skoye and Copper Mills projects at JSC PIMCU site)

Diversification at JSC PIMCU site

Develop potentially productive ura-nium projects (JSC PIMCU Mine 6, Kaldera, and Elkon) for long-term effective sup-plies to Rosatom

■ Ensure raw material sup-plies for the construction of WWER reactors: an effective raw material base not prone to any geopolitical risks and lasting for over 40 years

■ Additional cash flow and fi-nancial stability in 2019–2020

■ Minimise risks of a single product company

■ Support social and economic development in the regions of presence

■ Effectively distribute invest-ment resources

■ Achieve uranium production profitability

■ Assets are competitive on the global market

2014 2016 2020 2030

2

1

5

4

3


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Figure 8. Shareholding Structure as of December 31, 2013

Table 3. Shareholding Structure Dynamics in 2013, %

2.2.1. Corporate Governance

2.2.1.1. Corporate Governance ApproachJSC Atomredmetzoloto has the following priority

corporate governance objectives: ■ to comply with Russian and international corporate

governance standards; ■ to enhance the efficiency of governing bodies; and ■ to increase transparency for investors, companies

from the same industry, business partners, em-ployees, and other stakeholders.The Company ensures strict compliance with the

law. The corporate governance system is improved with the use of best Russian and global practices and OECD corporate governance principles.

On the Company’s website (http://www.disclosure.ru/issuer/7706016076/) you can find the Charter and

internal documents regulating activities of manage-ment and supervising bodies, and disclosure of sig-nificant facts and events related to ARMZ Uranium Holding Co.

2.2.1.2. ARMZ Uranium Holding Co. Authorised Capital and Shareholders

As of December 31, 2013: ■ JSC Atomredmetzoloto’s authorised capital was

RUB 23,507,954,710; ■ the Company placed 23,507,954,710 registered ordi-

nary shares with the nominal value per share being RUB 1.00 (issue registration numbers: 1-01-03912-А and 1-01-03912-А-005D); and

■ all three shareholders are registered in the Register of Shareholders (Rosatom State Corporation, JSC Atomic Energy Power Corporation, and JSC TVEL).

No. Shareholderas of December 31,

2011as of December 31,

2012as of December 31,

2013

1 JSC Atomic Energy Power Corporation

79.489 80.475 81.370

2 JSC TVEL 18.994 18.081 17.252

3 Rosatom State Corporation 1.517 1.444 1.378

Stake in JSC Atomredmetzoloto’s authorised capital

JSC Atomredmetzoloto JSC TVEL

JSC Atomic Energy Power Corporation

ROSATOM State Corporation

17.252%

100%

100%

81.370%

1.378%

2.2. Management System


28

Changes to Equity Holding Structure in 2013In 2013, the Company privately traded an additional

issue of shares to raise funds for the investment pro-gramme; 1,077,586,207 ordinary shares were placed for the benefit of JSC Atomic Energy Power Corpora-tion. The total funds raised through the 2013 additional issue were RUB 5.0 billion.

2.2.1.3. Management SystemThe corporate management system serves as the

basis for the Holding’s activities and has several layers.

Changes to the Company’s Management in 2013 ■ In October 2013, 50% of the United Uranium Com-

panies LLC’s authorised capital, owned by JSC Atomredmetzoloto, was carved out;

■ in October 2013 Uranium One Holding N.V. consoli-dated 100% of Uranium One Inc. (Canada), and Ura-nium One Inc. shares were delisted from the Toron-to and Johannesburg stock exchanges; and

■ in December 2013, the controlling stake (57%) in Uranium One Holding N.V. owned by JSC Atomred-metzoloto was carved out.

Figure 9. Structure of ARMZ Uranium Holding Co. Managing and Supervising Bodies

2.2.1.4. Management and Supervisory Bodies

General Meeting of ShareholdersThe General Meeting of Shareholders is the superior

governing body of JSC Atomredmetzoloto.In 2013 three General Meetings of Shareholders

were convened to discuss managerial issues: ■ approval of the new version of the Charter; ■ establishment of management and supervisory

bodies of the Company; ■ approval of the 2012 annual report and annual ac-

counting statements and distribution of profits; and ■ appointment of the executive body of the Company

(Director General).

Board of DirectorsThe Board of Directors is responsible for general

management of the Company’s activities and plays a key role in strategic management. The Board of Direc-tors includes five people not employed by the Company. All members of the Board of Directors have extensive experience in the nuclear industry.

In 2013 the Board of Directors included: ■ Vadim Jivov (Chairman); ■ Kirill Komarov; ■ Vladislav Korogodin; ■ Yekaterina Lyakhova; and ■ Yury Olenin.

Meeting of Shareholders

Internal Audit CommissionBoard of Directors Auditor

Director General


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Vadim JivovMember of the Board of Directors since September 7, 2007, Chairman since May 4, 2011Born in 1963 in Moscow, graduated from the Moscow Power Engineering Institute

03.2006 – 08.2007 Advisor to Director General, First Deputy Director General for Raw Material Management, First Deputy Direc-

tor General, and First Deputy Director General and Head of the TENEX Raw Material Supply Directorate

06.2007 – 05.2011 First Deputy Director General, Director General of JSC Atomredmetzoloto

04.2011 – to date Advisor to Director General, member of the Management Board, and Deputy of Deputy CEO and Director of

Rosatom Development and International Business Block

10.2012 – to date member of the TENEX Board of Directors

12.2010 – to date President of Uranium One Inc.

05.2013 – to date President of Uranium One Holding N.V.

Kirill KomarovMember of the Board of Directors since June 30, 2011Born in 1973 in St. Petersburg, graduated from the Urals State Law Academy

04.2007 – 12.2007 Director General of OJSC Atomenergomash

12.2007 – to date Deputy Director, Executive Director, and Director of JSC Atomic Energy Power Corporation

03.2010 – to date Executive Director of the NPC Directorate, Deputy CEO and Director of Rosatom Development and International

Business Block

05.2011 – to date Member of the Rosatom Management Board

Vladislav KorogodinMember of the Board of Directors since September 7, 2007Born in 1969 in Moscow, graduated from the Moscow Institute of Physics and Technology

06.2004 – 10.2007 Deputy Head of the Nuclear Material Industry Administration, Deputy Head of Nuclear Power and Nuclear

Fuel Cycle Administration of the Federal Atomic Energy Agency.

10.2007 – 03.2010 Director of the Marketing and Target Market Department, Deputy Director of JSC Atomic Energy Power Corpo-

ration

03.2010 – to date Deputy Director of the NPC Directorate, Director for NFC and NPP Life Cycle Management at Rosatom


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Yury OleninMember of the Board of Directors since September 7, 2007Born in 1953 in Kirovabad, Azerbaijan, graduated from the Yerevan Polytechnic Institute and Penza State Technical University

01.2004 – 03.2007 Director General of FSUE FRPC PC Start (Zarechny, Penza Region)

03.2007 – to date First Vice-President, President of JSC TVEL

02.2012 – to date Member of the Rosatom Management Board

Yekaterina LyakhovaMember of the Board of Directors since June 30, 2011Born in 1975 in Yekaterinburg, graduated from the Urals State Law Academy and the Universiteit Antwerpen Management School

07.2008 – 02.2010 Director General of JSC Koltsovo-Invest

02.2010 – 03.2011 Vice-President of JSC TVEL

04.2011 – to date Deputy Director of JSC Atomic Energy Power Corporation

07.2011 – to date Deputy Director of the NPC Directorate, Director for Investment Management and Operating Efficiency of

Rosatom State Corporation

The members of the Board of Directors own no JSC Atomredmetzoloto shares.

The Chairman of the Board of Directors does not act as an executive manager of the Company at the same time.

Sole Executive BodyDaily operations of the Company are managed by

the sole executive body, the Director General.The Director General of the Company is Vladimir

Verkhovtsev.Vladimir Verkhovtsev was born on January 27, 1955

in Uzbekistan.1977: graduated from the Felix Dzerzhinsky Military

Academy, qualified as Electronic Engineer.1999: graduated from the Military Academy of the

Russian Central Command of Armed Forces.Lieutenant-General, PhD in Technical Sciences,

Professor at the Russian Military Science Academy.1977–2011: held various positions within the USSR

and Russian Armed Forces.2005–2011: ran the 12th Central Administration of

the Russian Ministry of Defence responsible for nucle-

ar supplies and nuclear safety of the Russian Armed Forces.

July 2011: appointed Deputy Director General for Special Projects at JSC Atomredmetzoloto.

Since May 28, 2013: Director General of JSC Atom-redmetzoloto.

V. Verkhovtsev does not own JSC Atomredmetzoloto shares.

RemunerationThe 2013 remuneration paid to the executive body

and members of the Board of Directors was RUB 40.7 million.

ManagementAs of December 31, 2013, significant information

has been updated outside the reporting period.


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Internal Audit CommissionThe Internal Audit Commission acts as a corpo-

rate management body to improve the efficiency and transparency of managerial processes.

The Internal Audit Commission is responsible for financial and business monitoring, including:

■ review of financial documents, inventory results, compliance with standards, and validity of signed contracts;

■ analysis of the Company’s financial position, liquidity, and solvency; and

■ review of decisions made by management bodies for effectiveness and compliance with the Charter.The following members were elected to the Internal

Audit Commission at the Annual General Meeting of JSC Atomredmetzoloto Shareholders (Minutes No. 16 dated June 28, 2013):

■ Viktoriya Andriyenko, Chief Accountant at Rosatom State Corporation;

■ Marina Atmazhitova, Chief Specialist of the NFC Pro-duction Planning Unit, NFC Coordination and Devel-opment Department, NPC Directorate of Rosatom State Corporation; and

■ Yelena Vlasova, Advisor at the Internal Audit Unit of Rosatom State Corporation.

The members of the Internal Audit Commission own no Company shares.

In 2013 no remuneration was paid to the Internal Audit Commission.

Committees

Activities of the Investment CommitteeIn 2013 the Investment Committee of JSC Atom-

redmetzoloto (hereinafter referred to as the “Commit-tee”), the key investment decision making body of the Holding, convened 13 meetings.

Three committees were established in the form of joint attendance for joint discussion of issues re-lated to the 2013 by-project financing of ARMZ Ura-nium Holding Co. and making decisions on further implementation of the Olovskoye and Elkon invest-ment projects.

Ten votes by correspondence were conducted with regard to the projects. A total of 51 investment deci-sions were made.

In July 2013 the new Regulations on the Commit-tee were brought to effect and the composition of the Committee chaired by V. Verkhovtsev changed.

For more details see 3.2.2. Investment Activities.

Vladimir VerkhovtsevDirector General

Igor ZhilkinFirst Deputy Director General and Executive Director

Vladimir VysotskiyDeputy Director General for Special Projects

Marina LiborakinaDeputy Director General for Strategy, appointed Deputy Director General for Strategy and Busi-ness Development in April 2014

Yury TokmachevDeputy Director General for Safety

Vera SorokinaChief Accountant

Ilya KorolyovAdvisor to Director Gen-eral, appointed Deputy Director General for Administrative Issues in April 2014

Stanislav AnikeevActing Director for Personnel, appointed Personnel Director in January 2014

Ilya YaroshevichDirector for Russian Projects Legal Support, appointed Director for Corporate and Legal Relations in April 2014


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Activities of the Risk Committee ■ Draft regulating documents related to reputation

risk management and interest risk and the Proce-dure for Group-Wide Financing of the Holding were approved;

■ JSC Atomredmetzoloto’s exchange risk was recog-nized as being critical;

■ the Holding Exchange Risk Management Strategy and the 2013–2015 Hedging Programme were ap-proved, and it was recommended to close hedging transactions in accordance with the approved doc-uments;

■ current S&A lending limits were approved; and ■ the Production Facilities Insurance Programme

was analysed and adjusted with an account of the risk level changes, etc.For more details see 2.2.3. Risk Management.

2.2.1.5. Dividend Policy The JSC Atomredmetzoloto dividend policy is set by

the management bodies with an account of the required investment in compliance with the Company’s strategy.

From 2008 through 2013, according to the Com-pany’s development strategy, JSC Atomredmetzolo-to’s management bodies made decisions to abstain from dividend payments for reinvestment purposes in order to finance the investment programme. For this reason there were neither declared nor unpaid dividends.

As of the time of the Report preparation the Com-pany’s management bodies had not made any deci-sion about how to use 2013 earnings.

2.2.1.6. Major Transactions and Related Party Transactions

In order to protect stakeholders’ rights and inter-ests and to maintain its reputation in investment and industrial circles, the Company closes all major trans-actions in strict compliance with Russian law.

In 2013 the Company closed no major or related party transactions that would require approval from managerial bodies according to the Federal Law on Joint Stock Companies.

2.2.1.7. The Company’s RegistrarThe Company’s Register of Shareholders is kept by

Open Joint Stock Company R.O.S.T. Registrar.Registrar’s details:OGRN (Primary State Registration Number)

1027739216757, INN (Taxpayer Identification Number) 7726030449.

Located at: 18 Stromynka Ul., Bldg. 13, Moscow, Russia

T/F: (495) 771-73-36.

2.2.2. Report of the Board of Directors on Priority Lines of Business

In 2013 the Board of Directors convened 18 meet-ings and made decisions on some managerial issues critical to the Company, including:

■ approval of ARMZ Uranium Holding Co.’s target performance (KPI);

■ approval of the Code of Corporate Conduct; ■ coordination of Chief Accountant appointment; ■ setting remuneration for the top management; and ■ making decisions on the alienation of a 50% stake

in United Uranium Companies LLC and a 57% stake in Uranium One Holding N.V.

2.2.3. Risk Management

2.2.3.1. Risk Management SystemKey results in risk management at JSC Atomred-

metzoloto in 2013 were as follows: ■ the Corporate Risk Management System (here-

inafter referred to as “CRMS”) was integrated, including key planning and managerial decision processes (“budgeting”, “mid-term planning”, “strategic management”, and “investment activ-ities management”); the risk assessment proce-dure for the planning stage was introduced;

■ method development and relevant management of separate financial risks (financial, interest, com-modity risks, etc.);

■ introduction and regulation of business process-es for managing certain types of risks (reputation risk, compliance risk, etc.);

■ the “JSC Atomredmetzoloto risk safety” was de-termined, limits for critical risks were set, and risk management measures were taken; and

■ the risk hedging programme was implemented.


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Figure 10. Risk Management Structure at ARMZ Uranium Holding Co.

2.2.3.2. Key Risks and Key Risk Management

Table 4. JSC Atomredmetzoloto’s Critical Risks and Critical Risk Minimisation Measures in 2013

Type of risk Risk minimisation method

Operational risk

Property risk, asset loss/damage risk (risk of incurring property damage, property loss resulting from production emergencies, and a reduction of the Holding’s proceeds due to disruption of production)

■ The Holding employs a special system for regular production para-meter checks for monitoring entities’ activities and making proper decisions based on the current stage of production programme im-plementation;

■ the Holding takes preventive measures to avoid emergency situations and ensure safety;

■ the Holding insures its property at market value and third-party corpo-rate civil liability with Russian leading insurers according to approved Rosatom provisions and standards; and

■ in late 2013 the Holding decided to reduce its insurance programme in the course of entity budget review and setting milestones. The Compa-ny’s management ceased insuring management liability risks (that had been maintained by JSC Atomredmetzoloto for several previous years)

ARMZ Risk Register and Corporate

Roadmap

Director General

Risk Management Committee

ARMZ Risk Officer

ARMZ Risk Owner

S&A Risk Owner

S&A Risk Officer

S&A level

ARMZ level

preparationapproval

summary

information about risk

monitoring

information about risk

summary monitoring


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due to separation of the international block that significantly reduced such risks related to ARMZ Uranium Holding Co. managers. Based on the results of a risk assessment, the insurance programme for a num-ber of property risks was reduced due to significantly lower probabilities.

International political and reg-ulatory risk (for foreign assets managed by Uranium One Hold-ing)

■ JSC Atomredmetzoloto and its S&A continuously monitor changes in applicable law related to subsoil use, nuclear power use, environmental requirements and tax regulation, and the peculiarities of the Russian corporate law and the jurisdiction of its presence;

■ they use recommendations of the supervising and regulating bodies in the course of the Holding’s main activities at the international and na-tional levels; and

■ contracts are signed after coordination with legal services of the Com-pany (in certain cases independent advisers might be involved).

Reputation risk ■ The Holding has reputation risk monitoring regulations in place outlin-ing basic risk management procedures;

■ there are guidelines for relations with mass media in place; and ■ together with Rosatom State Corporation, the Holding analysed compli-

ance risks and introduced relevant regulating documents.

Social risks

Personnel-related risks The Holding actively implements its personnel management policy and employs a motivation scheme:

■ experienced mining specialists are attracted from other regions and a highly qualified workforce is attracted from adjacent industries;

■ personnel retention is ensured through a progressive system of remu-neration, privileges, and social security;

■ at all levels employees are offered training (including the future leaders programme); and

■ the Holding engages in infrastructure development in regions of oper-ation.

Safety and occupational safety risks

In 2013 the state of affairs in the nuclear industry was monitored closely. The Holding focused on increasing safety and occupational safety at pro-duction facilities and in regions of operation. This includes:

■ complex measures on increasing the safety of employees and local com-munities in the regions of operation and maintaining the balance of local eco-systems; and

■ reducing factors that have an impact on the number of emergencies and that threaten employees’ life and health.

Environmental risks: Nuclear and radiation safety risks

Technological risks, including nuclear and radiation safety

Technological risk management in the course of uranium extraction and processing, including nuclear and radiation safety. Ensured through a number of special measures, including:

■ industrial equipment upgrades at the Holding entities; ■ compliance with effective standards for the production and technologi-

cal process;


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■ monitoring by Holding subdivisions and external companies; and ■ insurance of civil liability to third parties and employees.

Environmental risks The Holding entities involved at different stages of uranium production comply with all statutory environmental standards. The Holding makes its best effort to decrease its environmental footprint and improve production eco-safety.

Financial risks

Exchange risk Exchange risks are traditionally managed through risk concentration at the parent company of the Holding so that JSC Atomredmetzoloto entities can focus on production. Exchange risks are reduced through:

■ management of the Holding’s open foreign exchange position that leads to adjustment of the credit portfolio structure to balance exchange assets and liabilities of the parent company; and

■ derivatives. Due to hedging transactions for 2013–2015, closed in 2013, JSC Atomredmetzoloto received about RUB 400 million from banks, and 2014–2015 cash flows were balanced.

Tax risks Tax risks related to new transfer pricing provisions introduced in the Rus-sian Tax Code are managed through the following measures:

■ including major Holding entities into the Rosatom CGT; ■ group-wide financing, security in the form of warranties/guarantees is

provided with an account of the market relations principle (interest rate/remuneration relevant to prices for similar arm’s-length transactions and to the situation within interest risk management programmes); and

■ supervising transactions closed on market terms.

Interest risk This type of risk is minimised in the following way: ■ external funds are raised with a fixed interest rate (no floating rates are

used due to the high volatility of current market conditions); and ■ group-wide financing within set (budget-based) financing limits to en-

sure annual budget performance.

Insolvency (liquidity) risk In 2013 JSC Atomredmetzoloto was not greatly affected by liquidity risk due to the policy regulating this very type of risk and including:

■ setting limits for JSC Atomredmetzoloto’s group of companies with sev-eral banks;

■ the introduction of a cash pulling system for effective use of the account balance of the entities included in the group; and

■ regular monitoring of the Group companies’ liquidity.

Credit risk (risk of default by counterparties)

■ Products manufactured by the Holding entities are mostly purchased by Rosatom, which significantly reduces credit risks;

■ credit risks related to procuring raw and other materials for the Holding entities are minimised through abstaining from advance payments un-der contracts with counterparties (advance payments are only possible in the amount set in regulatory documents and subject to counterparty’s obligation to pay them back in case of default); and


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■ the Holding entities cooperate with leading Russian credit institutions and insurers with requirements to them being set in the regulatory doc-uments of JSC Atomredmetzoloto and Rosatom State Corporation.

Commodity risk This risk is managed and minimised in the following way:

■ maintaining JSC Atomredmetzoloto’s stable position in the uranium market, as secured by Russian and global demand;

■ balancing price policy and management of available raw material sourc-es with account of international practice; and

■ product diversification and search for new products (for this reason the Holding takes part in managing entities involved in the production of gold and non-uranium materials).

Specific risks: Mining production risk

Risk of incorrect assessment of deposit quality and capacity

JSC Atomredmetzoloto takes the following measures to obtain the most comprehensive and high-quality information about existing fields and to minimise the risk of geological exploration data differing from actual ca-pacity:

■ employment of latest reserve balance recording and resource estima-tion methods, used as part of a best practice in Russia and globally, and latest geological exploration methods, including geologic and math-ematical models.


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The Holding risk management system will be fur-ther developed through practical application of the risk management experience accumulated. Risk manage-ment units mainly focus on risk identification and co-operation with risk owners to minimise risks with an account of the close connection between relevant busi-ness processes and planning and managerial decisions (“budgeting”, “mid-term planning”, “strategic manage-ment”, and “investment activities management”).

2.2.3.3. 2014 and Mid-Term PlansIn the future, risk management will be focused

on risk identification and optimisation related to operational efficiency enhancement and uranium business restructuring.

Holding business diversification risks will be one of the top priorities due to the high capital-output ratio and mining project ROI.

2.2.4. Internal Monitoring System: Asset Protection

2.2.4.1. Internal Monitoring SystemThe JSC Atomredmetzoloto Internal Monitoring

System ensures the more efficient operation and achievement of basic objectives and detects devia-tion from set objectives.

Internal monitoring covers JSC Atomred-metzoloto and its S&A.

Main monitoring activities: ■ monitoring of procurement and logistics processes

at ARMZ Uranium Holding Co.; and ■ inspections of construction, production, financial,

and business activities and funds application at ARMZ Uranium Holding Co., internal audit com-missions, and internal audits to identify business process risks.Under the Integrated Monitoring Plan of Special-

ised Internal Inspection and Audit Bodies of Rosatom State Corporation, 25 inspections were conducted in 2013, including:

■ inspections of the Company’s financial and busi-ness activities, investment programme implemen-tation, and construction organisation at S&A;

■ 14 internal audits; ■ 1 internal audit of personnel management process-

es and 1 inspection of the power-saving and en-hanced power efficiency programme for S&A being implemented; and

■ 2 centralised inspections. Besides that, specialised internal inspection

bodies of JSC Atomredmetzoloto and S&A carried out 66 unscheduled inspections and internal au-dits.

Based on the monitoring results, corrective measures were developed and their implementa-tion is being followed up.

Dmitry Gretsky, Operator and Hydrometal-lurgy Specialist at the Product Solution Pro-cessing Area of the In Situ Leaching Shop, JSC Khiagda

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2014 Plans The following priority activities were set for 2014:

■ planning and carrying out inspections and internal audits according to the approved Integrated Mon-itoring Plan of Specialised Internal Inspection and Audit Bodies of Rosatom State Corporation.

2.2.4.2. Safety Management System

2013 Results ■ Commercial operation of the integrated physical

security system (IPSS) was launched at the JSC PIMCU hydrometallurgical mill; IPSS construc-tion, installation, and start-up were completed at the main JSC Khiagda production site under the Rosatom analytical programme called “Enhance-ment of Physical Protection of Nuclear Materials, Nuclear Plants and Nuclear Storages up to 2015”.

■ Compliance was insured with the Regulations for Physical Protection of Nuclear Materials, Nucle-ar Plants and Nuclear Storages as approved by Russian Government Decree No. 456 dated July 19, 2007. No faults were found in the course of verifying the validity of licenses for nuclear equip-ment operation on the part of physical protection carried out by the Federal Service for Environmen-tal, Technological, and Nuclear Supervision (Ros-tekhnadzor).

■ Certification audit at JSC Atomredmetzoloto con-firmed compliance with ISO/IEC 27001:2005 (infor-mation security); JSC Atomredmetzoloto was the first one of the Rosatom entities to be granted an international information safety certificate.

■ The JSC Atomredmetzoloto LAN was prepared to be certified in terms of compliance with informa-tion security requirements of the Russian FSTEC;

■ Messages coming through the Rosatom hotline were checked thoroughly.

2014 Plans ■ To upgrade and enhance physical protection sys-

tems at certain facilities of JSC PIMCU, JSC Kh-iagda, and JSC Dalur. To delegate the function of providing security to all Holding facilities to At-om-Okhrana (Federal Budgetary Unitary Enter-prise);

■ to certify informational support objects of JSC Atomredmetzoloto for compliance with informa-tion security requirements of the Russian FSTEC;

■ to train employees in information security; and ■ to improve the system for economic safety, asset

protection, and combating corruption, and to provide better procurement monitoring to reduce the eco-nomic damage risks of the Company and its S&A.

2.2.4.3. Anti-Larceny ProgrammeJSC Atomredmetzoloto continued to ensure eco-

nomic safety and asset protection and to combat corruption and other violations.

2013 ResultsContracts were checked for signs of corruption and

JSC Atomredmetzoloto counterparties’ good faith was verified.

2014 PlansProcurement monitoring to diminish economic

damage risks related to the establishment of an au-thorised procurement body (ARMZ Service LLC).

2.2.5. Procurement Management

2.2.5.1. ProcurementJSC Atomredmetzoloto and its S&A use the following

documents regulating their procurement policies, pro-curement parties’ functions and authorities, procurement methods and types, additional elements of procurement procedures, the general procurement procedure, etc.:

■ Federal Law No. 223-ФЗ on Goods, Work and Ser-vice Procurement by Certain Types of Legal Enti-ties dated July 18, 2011 (as amended by Federal Laws No. 401-ФЗ dated December 6, 2011, No. 324-ФЗ dated December 30, 2012, No. 115-ФЗ dated June 7, 2013, No. 160-ФЗ dated July 2, 2013, and No. 396-ФЗ dated December 28, 2013); and

■ the Integrated Industry Procurement Standard (hereinafter referred to as the “Procurement Reg-ulations”) developed by Rosatom State Corporation and approved by the JSC Atomredmetzoloto Board of Directors. You can find the above documents at the official website www.zakupki.rosatom.ru, de-signed for the purposes of the placement of or-ders for goods, work and services for Rosatom.For more details on the Holding’s key procurement

principles and objectives, see the 2012 JSC Atom-redmetzoloto Annual Report, p. 89.

2.2.5.2. Procurement MonitoringThe efficiency of JSC Atomredmetzoloto’s procure-

ment is ensured through a bilateral procurement monitoring and control system.

On the one hand, the procurement system, price relevance, and quality are subject to public control. In-formation about the Holding’s procurement activities is published at official websites www.zakupki.rosatom.ru and www.zakupki.gov.ru for public access.

On the other hand, procurement is monitored by the Holding’s internal structures and Rosatom’s spe-


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cial units to ensure that procurement complies with the requirements of regulatory documents and does not violate participants’ rights and interests.

For more details on the internal control system see the 2012 JSC Atomredmetzoloto Annual Report, p. 90.

2013 ResultsRosatom SAP SRM was completely integrated at

the Holding entities.Based on 2013 results, over 2,000 bids were held

to cover the Holding’s needs. Of the bids, 98.94% were electronic, which provides for better procure-

ment transparency. Based on the results of the bids, the cost advantage (the difference between initial price and the winner’s offer price) was RUB 1.004 billion.

2014 PlansIt is anticipated that the Company will hold about

1,500 procurement bids. An authorised procurement body (ARMZ Service LLC) was established on the ba-sis of ESK ARMZ for more efficient procurement of goods, work, and services by S&A controlled by JSC Atomredmetzoloto. One of its priority activities is to develop a category management system.


Anton Shumkin, Operator and Hydrometallurgy Spe-cialist at the Product Solution Processing Area of the In Situ Leaching Shop. Labelling, JSC Khiagda

Due to ARMZ Uranium Holding Co.’s business di-versification, in 2013, several projects were imple-mented to ensure its scale and sustainability. CJSC RUSBURMASH and JSC VNIPIpromtechnologii, the

Holding’s geological survey and engineering com-panies, faced the strategic challenge of increasing the amount of their orders outside the Russian nu-clear industry.

2.3. Strategic Assets

4040

2.3.1.1. History of and Other Information about CJSC RUSBURMASH

CJSC RUSBURMASH (CJSC RBM) was founded in 1998 and was included in JSC Atomredmetzoloto in 2007 to drill process wells at the Holding’s operating entities. Since 2009, ARMZ Uranium Holding Co. has been the sole shareholder of CJSC RUSBURMASH.

In 2009 the Geological Exploration Service was established within CJSC RUSBURMASH to car-ry out uranium geological exploration (GE) at the Olovskoye, Beryozovoye, Istochnoye, Kolichikan-skoye, and Elkon fields. Apart from process and technical drilling and construction, CJSC RBM

started drilling exploration wells at the Kolichi-kanskoye field (Khiagda ore field) using its own re-sources. Since 2009 the company has been provid-ing 14–16 types of drilling services for JSC PIMCU.

In 2012, CJSC RUSBURMASH started participating in ARMZ Uranium Holding Co.’s international project in Africa (South Tanzania and Mozambique). In 2012 a branch of CJSC RUSBURMASH was opened in Ka-zakhstan to perform geological exploration.

CJSC RUSBURMASH is a rapidly developing geo-logical exploration company that offers drilling and exploration services. The company has its branch-es in Russia and Kazakhstan and boasts over 700 highly qualified employees.

2.3.1. CJSC RUSBURMASH Activities


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2.3.1.2. Interview with CJSC RUSBURMASH Director General Igor Savelyev

– Mr Savelyev, what do you think about RUS-BURMASH’s performance in 2013? What was spe-cial about this year?

– In general 2013 turned out to be a difficult year for us because of a drop in orders within the Hold-ing. This challenge gave us an impetus for struc-tural reorganisation and diversification to enter ex-ternal markets.

It was in 2013 that we first participated in third-party bids, and I must say, we were quite suc-cessful. We got the biggest long-term order from the government for lode gold exploration at the Ver-khne-Bryantinskoye ore cluster (Amur Region), an order for drilling geological exploration wells at the Ozyornoye lead and zinc field (Buryatia), an order for hydrogeological and geotechnical survey at the Borguliuansskoye ore field, and an order for sub-surface water hydrogeological survey for service,

potable, and process water supply of the Power of Siberia pipeline.

Naturally we need to get more mobile and effi-cient to attract more third-party orders. We have optimised the management system, established a drilling department (in Chita), a mobile drilling of-fice, subdivisions responsible for business develop-ment, external relations, and marketing and sales. The new subdivisions will analyse the market of drilling, geological exploration, and other services in Russia, Kazakhstan, and other countries and ex-pand our customer database.

– Has your Efficiency Enhancement Programme yielded any results yet?

– In 2013 we launched the Efficiency Enhance-ment Programme (EEP). Under this programme, we introduced 19 measures and projects with the economic effect of RUB 26.9 million confirmed by a third-party expert. And this is only the start.

– Could you expand on your competencies and unique technologies?

– CJSC RUSBURMASH is a geological exploration company, and we do not depend on any specific fa-cilities. Our employees are highly-qualified geolo-gists and drilling specialists.

One of our unique technologies is constructing wells for uranium in situ leaching; this is one of our primary types of work. I would also like to mention the new-generation integrated hardware and me-thodical logging system for direct uranium identi-fication in wells with the prompt neutrons method. This system is currently under pilot operation, but there is already demand for it in Russia and Ka-zakhstan.

– What are your current priority activities and potential projects?

– We are now focussed on becoming one of the leaders in the Russian geological exploration ser-vice market. To achieve this, we are planning to further increase our activities and regions of op-eration, maintain our work quality at a high level, fulfil our obligations to our customers, and further increase our efficiency.


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Capeca

Mkuju River Nyota

Zarechnoye KharasanBudyonovskoye

Khokhlovskoye

Dalmatovskoye

Uranium ore, uranium-gold ore, and uranium-vanadium ore deposits

Porphyry copper deposits

Gold and gold-silver ore deposits

Complex ore deposits

Subsurface water deposits

Khiagda ore fieldOlovskoye

OzyornoyeBeryozovoye

Pogromnoye

Power of Siberia pipeline

Streltsovskoye ore fieldArbinskoye

Verkhne-BryantinskoyeLunnoye

NeprokhodimoyeSevernoye

South areaElkon

2.3.1.3. 2013 Key Events

March–April ■ CJSC RUSBURMASH performed assessment geologic

survey at the Arbinskoye molybdenum and copper and porphyry ore deposits (Amur Region), analysed the hy-drogeological and geotechnical conditions of the field, and prepared materials for a reserves estimate and geo-logic and economic assessment (for UK INTERGEO LLC).

June ■ CJSC RUSBURMASH successfully completed explo-

ration and hydrogeological works in the Arbinskaya area (Amur Region) and attested the final report (for UK INTERGEO LLC).

August ■ Under the R&D project related to the New-Genera-

tion Integrated Hardware and Methodical Logging System for Direct Uranium Identification in Wells with the Prompt Neutrons Method, CJSC RUS-BURMASH successfully completed field pilot run of the System at Dalmatovskoye (Khokhlovskoye field).

September–November ■ Technological uranium ore sampling performed in

situ with the Push-Pull method at the Nyota field

(for Mantra Tanzania Limited). Commercial urani-um content in product solutions was determined, and the possibility of sulphuric DISL uranium pro-duction confirmed.

■ Pilot testing of the hardware and methodical log-ging system was successfully conducted at JV KATCO (Kazakhstan, Tortkuduk field).

■ Under contract with TECHGAZSTROY LLC, CJSC RUSBURMASH commenced a prospect evaluation survey (continuing through 2014) for service, po-table, and process water supply of the Power of Siberia pipeline.

■ CJSC RUSBURMASH implemented the Soil and Environmental Surveying programme within the SRO SOYUZATOMGEO advanced training scheme.

December ■ Under the state contract with the Amur Region

Subsoil Use Administration (Amurnedra), CJSC RUSBURMASH performed lode gold exploration at the Verkhne-Bryantinskoye ore cluster (Amur Re-gion) and prepared an annual informative report.

■ CJSC RUSBURMASH provided technological sup-port for drilling 279 wells (136 exploration and 143 process wells) (for JV RBM-Kazakhstan). CJSC RUSBURMASH developed a programme for the significant enhancement of drilling performance at the Budyonovskoye and Khorasan fields (up to 40%).

Figure 11. CJSC RUSBURMASH Project Map


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Capeca

Mkuju River Nyota

Zarechnoye KharasanBudyonovskoye

Khokhlovskoye

Dalmatovskoye

Uranium ore, uranium-gold ore, and uranium-vanadium ore deposits

Porphyry copper deposits

Gold and gold-silver ore deposits

Complex ore deposits

Subsurface water deposits

Khiagda ore fieldOlovskoye

OzyornoyeBeryozovoye

Pogromnoye

Power of Siberia pipeline

Streltsovskoye ore fieldArbinskoye

Verkhne-BryantinskoyeLunnoye

NeprokhodimoyeSevernoye

South areaElkon

2.3.1.4. 2013 Key Performance Indicators

In 2013 CJSC RUSBURMASH revenue went up by 8% up to RUB 1,760.21 million. The company ensured effective prime cost management and increased its financial performance.

2.3.1.5. 2013 Operational Performance

The GE Service performed all works planned in full. The total scope of drilling by CJSC RUSBURMASH en-tities went up to 561.14 thousand metres.

Figure 12. CJSC RUSBURMASH Revenue and Gross Margin

Revenue, thousand RUB

1,97

7,56

3

2012

1,63

3,02

4

2013

1,76

0,20

9

2011

Gross margin, thousand RUB

270,

206

2012

95,3

77

2013

216,

790

2011

KPIActual Actual Deviation

(actual in 2013 to actual in 2012), %2012 2013

Revenue from goods, work, and services 1,633 1,760 127 8

Prime cost of goods, work, and services 1,537 1,544 6 0

Gross margin 96 217 121 127

Business expenses 0 0 0 0

Management expenses 183 177 -6 -3

Sales profit/(loss) -87 40 127 -145

Table 5. 2012–2013 Key Performance Indicators, million RUB, %

Figure 13. Total Metreage Drilled, thousand m20

1146

5.12

2012

446.

72

561.

1420

13

In 2013 the Geological Exploration Service per-formed the following works:

■ completion of all planned exploration drilling, in-cluding:

■ technological and process and exploration drill-ing for JSC Khiagda ahead of the drilling sched-


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and projects is verified on a daily basis. Eighty-two measures and projects were implemented successfully.

Their total economic effect was RUB 26.9 million.

2014 Plans:Further implementation of the Efficiency Enhance-

ment Programme occurred in the following directions: ■ enhanced performance and cost reduction (eco-

nomic effect); and ■ stabilisation of efficiency enhancement processes

(development of the System).

2.3.1.7. 2014 and Future Plans

The Company will focus on the following priority activities:

■ fulfilment of all obligations in drilling and geological exploration to ARMZ Uranium Holding Co. entities;

■ continuous improvement of operational efficiency, work quality, and proper performance. Implementa-tion of the Efficiency Enhancement Programme; and

■ business diversification: expanding presence, also on international markets (Kazakhstan and Africa), and increasing goods and service competencies (new activities within the company’s portfolio: en-gineering survey, environmental monitoring, etc.).

Long-Term Strategic Objectives of the Company: ■ by 2017, to increase the revenue from projects out-

side ARMZ Uranium Holding Co. up to 50% (also due to engineering survey/environmental monitor-ing within Rosatom State Corporation).

ule and with a 5% drilling performance increase; ■ an additional work schedule for operational di-

versification: geophysical operations, monitoring of operating geophysical in situ leaching sites, and backfill and recovery operations at the pro-cess wells of JSC Khiagda;

■ prospect and appraisal drilling performed at the Bezymyanskaya block and the Pavlovskoye field (Novaya Zemlya) and the annual informative re-port preparation; and

■ completion of customers’ investment pro-grammes for the geologic support of geological exploration.

■ increased revenue from GE by 9% year-on-year; and ■ under the R&D project related to the New-Gener-

ation Integrated Hardware and Methodical Logging System for Direct Uranium Identification in Wells with the Prompt Neutrons Method, CJSC RUSBUR-MASH successfully completed a field pilot run of the System at Dalmatovskoye (Khokhlovskoye field) and at JV KATCO (Kazakhstan, Tortkuduk field).

2.3.1.6. Efficiency Enhancement Programme

In 2013 the Efficiency Enhancement Programme was introduced to increase work performance, reduce cost per unit and ensure loss-free operation. The pro-gramme was launched in August 2013.

Every three months the management committee of the programme reviews a new pool of measures and projects. Implementation of the approved measures

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2.3.2. JSC VNIPIpromtechnologii Activities

2.3.2.1. General Information

JSC VNIPIpromtechnologii (Design Prospecting and Scientific Research Institute of Industrial Technology) is engaged in R&D concerning the integrated design of uranium mining and ore processing facilities and radi-oactive disposal facilities. The company can offer turn-key services due to the wide range of its competencies.

Engineering surveys and research

Development of mineral raw materials mining

and processing

Industrial facility design

Construction of turn-key mining facilities

Scientific and technical and technological operational support

of facilities

Land reclamation at production sites

Treatment of radioactive and other waste from production

facilities

Figure 14. JSC VNIPIPROMTECHNOLOGII Main Activities


Visualization of the local sorption unit to produce uranium from solutions which designed by JSC VNIPIpromtechnologii employees

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2.3.2.2. Interview with JSC VNIPIpromtechnologii Director Viktor Svyatetsky

– Mr Svyatetsky, what were the main objectives of VNIPIpromtechnologii in 2013? Have you man-aged to achieve them?

– We are facing quite a big challenge. We are to ensure efficiency and profitability and be on demand with a wide range of customers. To facilitate that, in 2013 we approved a development programme specifying short-term measures to be taken and outlining basic programme directions up to 2030. It is very important for us that the programme is a product of the joint effort of our employees; the personnel engagement level increased by nearly 20% while working on the programme.

In 2013 our main production objectives were to design mines for JSC PIMCU and infrastructure fa-cilities for JSC Khiagda and JSC Dalur. These will be completed in 2014. We completed our plan for the first stage of our contract with National Operator for Nuclear Waste Management and designed the first stage of final nuclear waste isolation facilities.

– What can you say about your company’s pros-pects? What projects are your top priorities?

– In my opinion, we should work on our penetra-tion into new markets. Now NW treatment projects account for a significant share of our portfolio. If we participate in federal target programmes and in EAEC and EU programmes, we will stabilise our-selves on the nuclear waste management market that demonstrates good prospects.

Environmental engineering is another progres-sive type of activity in our sphere. Here we can co-operate with big leaders like Gazprom and Rosneft. We have specialists literate in unique technologies and have broad experience in the disposal of vari-ous types of industrial waste.

We will deal with uranium and gold and also with rare earth and non-ferrous metals on the main mining market. Now we take an active part in programmes related to the ancillary mining of rare earth metals, and I think we have quite good chances in disposing man-made waste resulting from production activities, such as re-processing sulphur waste and producing ferrous, non-ferrous, and precious metals from them.

In terms of our current production programme, the projects most important for us are those relat-ed to the optimisation of existing uranium produc-tion (JSC PIMCU, JSC Khiagda, and JSC Dalur).

Apart from traditional design, we now also en-gage in EPCM contracts. This implies complete project management, including procurement of equipment, construction, and start-up and fol-low-up maintenance. An example of this type of work is the turn-key project Basic Uranium Raw Material Specifications for JSC Dalur.

Construction Department employees, JSC VNIPIPROMTECHNOLOGII

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2.3.2.3. Historical Background

JSC VNIPIpromtechnologii was established over 60 years ago to design uranium production facili-ties under the USSR nuclear programme.

Over 10 major ore mining and processing facili-ties were built in the former USSR territory under VNIPIpromtechnologii design, such as Leninabad IMCP (Integrated Mining and Chemical Plant), Navoi NMMC, Priargunye IMCP, Kyrgyzstan MC (Mining Company), Eastern OMDP (Ore Mining and Dress-ing Plant) (Ukraine), Tselinograd IMCP, Prikaspi-ysky IMCP, Navoi NMMC, Bukinay Mining Company (uranium ISL), Transbaikal MC, and Muruntau Gold Mining Company. It also took part in designing fa-cilities in Mongolia, China, Germany, and Czecho-slovakia.

In addition to mining companies, VNIP-Ipromtechnologii designed many infrastructure facilities, including heavy-duty hydrometallurgical and repair and engineering works; motor trans-port establishments with repair facilities, thermal power stations, and boiler houses; external and internal utilities; communications infrastructure, automated storage facilities; and whole towns and settlements.

VNIPIpromtechnologii developed the construc-tion project of the shielding plate under the 4th Chernobyl NPP power generating unit and tube construction options.

Lately VNIPIpromtechnologii has focused on rec-lamation of land polluted with radionuclides and the construction of nuclear waste storages and re-positories.

Today JSC VNIPIpromtechnologii is included in the Rosatom Uranium and Mining Division and is a subsidiary of JSC Atomredmetzoloto.

2.3.2.4. 2013 Key Events

May ■ JSC VNIPIpromtechnologii was certified according

to the new GOST ISO 9001-2011 (certificate of com-pliance issued).

August ■ The JSC Atomredmetzoloto management ap-

proved the Step-by-Step Development of JSC VNIP-Ipromtechnologii up to 2030.

September ■ The JSC Atomredmetzoloto management ap-

proved the Plan for Establishment of the ARMZ Uranium Holding Co. Engineering Company Based on JSC VNIPIpromtechnologii.

■ JSC VNIPIpromtechnologii entered into a collec-tive agreement with shop-floor union organisa-tion for 2013–2015.

■ NRNU MEPhI, JSC VNIIHT, and JSC VNIP-Ipromtechnologii signed a collaboration agree-ment.

October ■ NRNU MEPhI, National University of Science and

Technology MISiS, and JSC VNIPIpromtechnologii were among the winners of a pilot project com-petition for establishing and developing engineer-ing centres in Russia based on leading technical universities. The competition was mounted by the Russian Ministry of Education and Science and the Russian Ministry of Industry and Trade.

November ■ A dryer construction pilot project (JSC Dalur) was

launched under an ЕРСМ contract.

December ■ The committee of nuclear SROs recognized JSC

VNIPIpromtechnologii as the Best Design Company among Nuclear SROs.

Viktor Svyatetsky, Director of JSC VNIPIPROMTECHNOLOGII

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Work at operating facilities

Radiation safety operations

Land reclamation

Liquid waste disposal

Spent nuclear fuel disposal

Industrial facility design

Social facility design

Moscow


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JSC VNIPIPROMTECHNOLOGII: 63 years of successful project implementation

■ Integrated services employing innovative technologies in mining, processing, nuclear waste disposal, etc.;

■ providing services for mining entities regardless of the degree of preparation and content of resources;

■ wide experience in industrial facilities design in the mining and adjacent industries;

■ rich intellectual resources (over 30 ScDs and PhDs); ■ IAEA certified specialists in uranium site reclama-

tion; and ■ extensive experience in nuclear waste treatment

and disposal and a unique database on tailing stor-ages of former uranium sites in Russia and abroad.

2.3.2.5. 2013 Key Performance Indicators

VNIPIpromtechnologii demonstrates a gradual reve-nue increase and a gradual reduction of subcontracting scope, which means that the company performs more work using its own resources. In 2015–2016, the inten-tion is to increase the amount of third-party orders by transforming the company into a modern engineering centre.

Most 2013 losses were caused by writing off accounts receivable for 2012.

Growing net assets prove the company’s stable fi-nancial position.

Over the next three years the plan is to focus on es-tablishing a knowledge-sharing system and rotate per-sonnel without attracting a new workforce.

2.3.2.6. Main Activities

2013 Activities in Russia and Abroad (Project Roadmap)

In 2013 JSC VNIPIpromtechnologii performed an en-gineering survey and designed production and social and welfare facilities in Russia, Tajikistan, and Kyrgyzstan.

2.3.2.7. Efficiency Enhancement Programme

In 2013 JSC VNIPIpromtechnologii launched the automation of basic business processes that are in-dispensable for a modern design company and better project quality. By the end of the year the average work-force productivity had increased by 11% and was RUB 1.8 million per person.

Figure 15. 2013 VNIPIpromtechnologii Project Map

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IndicatorsActual performance BSC indices

2011 2012 2013 2014 2015 2016

Revenue (NET) from product sales, total:(work, services) (excl. VAT, excise taxes, and other statutory payments)

751,222 624,190 1,016,661 970,395 882,262 990,008

including industry entities (Rosatom State Corporation)

642,086 548,330 951,830 814,936 456,117 655,599

Other counterparties 109,136 75,861 64,831 155,459 426,146 334,409

Own resources, including: 512,327 540,097 765,899 820,682 826,334 869,581

Industry entities (Rosatom State Corpora-tion)

416,660 466,236 705,468 683,006 416,226 589,456

Other counterparties 95,667 73,861 60,431 137,676 410,109 280,125

NET REVENUE 2,481 2,750 -91,244 57,382 47,783 52,990

Net assets 385,066 387,816 296,780 551,217 577,467 592,574

Asset value 636,588 947,043 875,463 866,021 852,704 853,639

Total amount of taxes, duties, and fees paid to the budget and non-budgetary funds

175,339 295,866 279,055 215,215 249,476 262,404

Average number of employees 479 442 409 402 405 405

Accrued dividends, total 60,000 0 0 0 21,533 37,882

Gross margin 116,925 115,162 122,375 282,277 262,361 265,386

Table 6. 2011–2013 VNIPIpromtechnologii Key Financial Indicators, RUB thousand

2.3.2.8. 2013 Results

ProductionIn 2013, JSC VNIPIpromtechnologii performed under

85 contracts, and its total revenue was RUB 1,010.66 million, including:

■ design and survey — 44 contracts to the total of RUB 345.41 million;

■ special operations — 5 contracts to the total of RUB 506.50 million; and

■ R&D — 36 contracts to the total of RUB 164.75 million.JSC VNIPIpromtechnologii’s main customers were

JSC Atomredmetzoloto S&A (JSC PIMCU, JSC Dalur and JSC Khiagda), and Rosatom State Corporation and its entities (NO RosRAO, Rosenergoatom, Ros-RAO, JSC Siberian Group of Chemical Enterprises, JSC Integrated Mining and Chemical Plant, etc.). Third-party customers were represented by Kovdor-sky GOK, JSC Polyus, Lukoil Perm LLC, TYNGD LLC,

JSC Gazprom Neftekhim Salavat, JSC Kaustic, JSC Soda, and JSC Trevozhnoye Zarevo.

Former uranium production sites were reclaimed in Russia (Almaz, Lermontov) and other countries under the international EEC contract Land Reclama-tion in EEC Countries Exposed to Uranium Produc-tion (Tajikistan and Kyrgyzstan).

Two projects were certified by state experts (TPP Ash Dump Construction at JSC PIMCU and Reconstruction of the Sredneye Tailing Storage at JSC PIMCU).

JSC VNIPIpromtechnologii creates a significant economic effect for its customers. For example, due to the technical solutions suggested under the TPP Ash Dump Construction at JSC PIMCU capital invest-ment went from RUB 1,826.27 down to RUB 249.12 million, as measured in Q3 2012 and excluding VAT. Under Project Documentation Development for De-sign Solution Optimisation Related to Construction of a Drainage Channel at the Urtuysky Section, RUB 911.87 million was saved in 2013.

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ResearchIn 2013, JSC VNIPIpromtechnologii performed the

following research work: ■ enhanced mine development at operated uranium

fields and ensured mining operations safety; ■ assessed nuclear subsurface burst sites and devel-

oped reclamation plans; and ■ assessed and considered further use of liquid waste

subsurface storages.VNIPIpromtechnologii has completed a package of

works of establishment for the Integrated State NW Treatment System (ordered by Rosatom State Corpo-ration). The company also worked on NW treatment solutions in terms of innovative nuclear power gen-eration trends ensuring the complete closure of the nuclear fuel cycle.

VNIPIpromtechnologii was issued four patents in Russia:

■ Patent No. 2476819 Method for Blasting Ore and For-mations in Subsurface Mining. By: S. Rubtsov, A. Se-leznyov, and V. Yershov;

■ Patent No. 2475874 Method for Subsurface Disposal of Biohazardous Drain Water. By: N. Prikhodko;

■ Patent No. 2477181 Method for Lode Rock Preconcen-tration in Vein Gold Open Cut Mining. By: N. Lobanov, Ye. Kamnev, V. Kasatkin, and V. Latyshev; and

■ Patent No. 2492534 Method for Liquid Industrial Waste Subsurface Storage Monitoring. By: Yu. Kultin, Ye. Bay-dariko, A. Rybalchenko, and P. Vereshchagin.

2.3.2.9. 2014 Plans

■ To increase the amount of third-party orders; ■ to implement the Engineering Centre project, in-

cluding: ■ switching over to the modern matrix manage-

ment organisation with up-to-date project man-agement; introducing a computer-aided design system and management systems;

■ establishing a competency development system (including for competencies related to EPCM pro-ject management); and

■ increasing client focus and service quality; and ■ in connection with the Rosatom Production Sys-

tem implementation, at the first stage it is planned to integrate a 3С system covering 80%–100% of employees and a 5С system covering about 30% of employees.

A surveying team at work at the Yermakovsky field, Buryatia


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EFFECTIVE CAPITAL MANAGEMENT3.1. The Company’s Capital

3.2. Financial Capital Management

3.3. Production Capital Management

3.4. Human Capital Management

3.5. Intellectual Capital Management

3.6. Social Capital Management

3.7. Natural Capital Management


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3.1. The Company’s Capital“Capital” implies certain resources (reserves) of

tangible and non-tangible assets employed in the Company’s activities: financial, production, human, intellectual, social, and natural capital.

The Company acknowledges that a part of its re-sources is co-owned by other stakeholders (e.g. nat-ural resources and public infrastructure) and treats such resources accordingly.

3.2. Financial Capital Management

3.2.1. Financial Management*

Financial capital management involves financial strategy implementation and investment policy.

Financial PolicyJSC Atomredmetzoloto’s financial policy is based

on complying with the corporate regulations and fi-nancial policy of Rosatom State Corporation. In 2013 the financial policy was further integrated at the Hold-ing entities for the purpose of later treasury function centralisation.

JSC Atomredmetzoloto pursued the following fi-nancial strategic objectives:

■ to ensure financial stability of the Holding entities and at the same time concentrate the majority of temporarily available cash of the companies within the cash pulling system run by JSC Atomic Energy Power Corporation;

■ to ensure effective financing of operational and in-vestment activities of the Holding’s operated enti-ties and new projects; and

■ to manage financial risks of the Holding.

2013 Results ■ A number of transactions were closed to raise

funds for purchasing a 100% stake of Uranium One Inc. and for separating international assets from Atomredmetzoloto and consolidating such under Uranium One Holding N.V. control accord-ing to the shareholder strategic decision to es-tablish an international mining division;

■ the Holding continued its cooperation with Rus-sian and foreign banks and its entities signed credit and trade finance contracts;

■ the exchange risk hedging programme was im-plemented with the use of derivatives;

■ treasury operations were further centralised and group-wide financing was developed on the basis of products offered by the base bank for more ef-

* The Financial Management section is based on the consolidated IFRS financial statements for the period ending on December 31, 2013.

fective employment of internal financial resourc-es by the Holding entities;

■ in order to minimise the diversion of the Holding’s own cash, sureties and bank warranties were used as collateral in case of procurement paid from the Holding’s own and extra-budget funds, which allows reduction of financial risks related to advance pay-ments and the stimulation of proper fulfilment of contractual obligations by counterparties;

■ the Treasury Settlement Centre (Rosatom auto-mated corporate system) was introduced, provid-ing for automated recording of financial transac-tions and setting aside the financial performance part of management statements;

■ norms and methods were introduced for interest risk management while taking into account the transfer pricing legislation; and

■ management of the entities’ lending limit was continued to ensure effective management of the Holding’s operating and investment credit portfo-lio; a limit preventive control system was estab-lished on the basis of Holding budget planning and by-quarter forecast.Due to targeted financial policy and the above

measures, ARMZ Uranium Holding Co. liquidity ratio fell within the target limits and the Holding demon-strated financial stability in spite of operational loss and low activity on the global uranium market after the Fukushima Daiichi disaster.

When IFRS 11 Joint Arrangements came into ef-fect, ARMZ Uranium Holding Co.’s altered its account-ing policy for the part about disclosing equity interest in joint ventures. Since 2013, such equity interest shall be disclosed through equity accounting (previously pro-portionate consolidation was used). To ensure compa-rability of statements, comparative values for previous reporting periods included in the statements were re-calculated based on the altered accounting policy.

In accordance with Rosatom’s decisions and strat-egy related to the development of the international


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mining division run by Uranium One Holding N.V., on December 5, 2013, JSC Atomredmetzoloto sold a controlling stake (57%) in Uranium One Holding N.V., which at that time owned an 89.07% stake in Uranium One Inc. As a result, JSC Atomredmetzolo-to ceased consolidating its subsidiaries, disposed of and applied the equity accounting method for the disclosure purposes. For the purpose of statements preparation, these foreign subsidiaries were classi-fied as ceased business. Comparative values were also adjusted to account for ceased business and on-going business separately.

The 2013 results on the global uranium and urani-um product market prove the stability of negative price trends. This caused a significant (RUB 22,874 million) impairment of some mining assets and assets under construction that belong to ARMZ Uranium Holding Co.

This, together with the non-profitability of current production operations (due to diminished yield of the field and resulting high mining costs) at JSC PIMCU, ARMZ Uranium Holding Co.’s main entity, caused the 2013 net loss equal to RUB 24,165 million, excluding ceased activities, and RUB 13,834 million, including the ceased activities.

Valery Skosyrsky and Vyacheslav Stremilov, Underground Mine Repair Operators at the Product Solution Process-ing Area of the In Situ Leaching Shop. Well washing, JSC Khiagda


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Financial Performance

million RUB 2012* (recalculated)

2013

Sales proceeds 33,810 31,819

Cost of goods sold (27,705) (26,922)

Gross margin 6,105 4,897

Administrative and selling expenses (4,781) (5,195)

Other expenses (188) (82)

Operating (loss)/profit 1,136 (380)

Fixed asset impairment loss (49) (4,820)

Intangible assets impairment loss – (3 ,403)

Goodwill impairment loss (10,630) (10,713)

Exploration and assessment impairment loss (260) (3,938)

Financial income 378 1,534

Financial loss (715) (2,096)

Share in losses of financial investment assessed by equity accounting (4) (3)

Loss before income tax (10,144) (23,819)

Income tax (938) (346)

Net loss for the period (11,082) (24,165)

Ceased business

Profit from ceased business, less income tax 2,047 10,331

Loss for the year (9,035) (13,834)

For reference only:

EBITDA 2,779 1,753

Net operating profit after tax (NOPAT) 1,031 (374)

Table 7. JSC Atomredmetzoloto Profit and Loss Statement

* 2011–2012 indices may differ from similar indices provided in the 2012 JSC Atomredmetzoloto Annual Report


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million RUB 2012* (recalculated)

2013

Loss for the period owed to:

JSC Atomredmetzoloto shareholders (9,071) (11,309)

Non-controlling equity share 36 (2 525)

Total loss for the period (9,035) (13,834)

Loss for the year from ongoing business (11,082) (24,165)

Loss for the year (9,035) (13,834)

Items not to be later reclassified for profit or loss

Re-evaluation of pension schemes with set payments (211) (55)

Total (211) (55)

Items that have been or may later be reclassified for profit or loss

Exchange rate difference resulting from conversion of foreign companies' indices from other currencies

(1,818) 1,093

Hedging reserve 185 (601)

Total (1,633) 492

Other aggregated profit / (loss) from ongoing business (1,844) 437

Other aggregated profit / (loss) from ceased business (7,027) 1,393

Total other comprehensive income / (loss) (8,871) 1,830

Total aggregated loss from ongoing business (12,926) (23,728)

Total aggregated profit/(loss) from ceased business (4,980) 11,724

Total aggregated loss (17,906) (12,004)

Total aggregated loss for the year owed to:

JSC Atomredmetzoloto shareholders (15,647) (10,776)

Non-controlling equity share (2,259) (1,228)

Total aggregated loss for the year (17,906) (12,004)


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million RUB 2011 (recalculated)*

2012 (recalculated)*

2013

ASSETS

Fixed assets 33,759 39,373 35,833

Intangible assets 20,345 19,850 14,869

Goodwill 40,638 28,052 –

Exploration and assessment assets 5,557 8,068 4,931

Investments in associated companies 1,253 1,207 30,127

Investments in joint ventures 61,846 55,922 –

Other non-current assets 2,424 3,171 7,677

TOTAL non-current assets 165,822 155,643 93,437

Reserves 11,479 10,189 6,720

Income tax paid in advance 562 605 196

Accounts receivable and advance payments 4,823 7,641 4,907

Cash and cash equivalents 21,189 16,713 1,166

Other current assets 2,145 1,851 3,364

TOTAL current assets 40,198 36,999 16,353

TOTAL ASSETS 206,020 192,642 109,790

EQUITY

Shareholder equity 20,257 22,430 22,430

Share premium 53,963 56,962 61,962

Reserve related to incorporation 7,201 7,201 7,201

Translation reserve 6,048 (502) 687

Retained profit / (accrued loss) 20,958 7,950 (20,162)

Equity of JSC Atomredmetzoloto shareholders 108,427 94,041 72,118

Non-controlling equity share 39,645 37,686 (2,086)

Table 8. JSC Atomredmetzoloto Balance Sheet

* 2011–2012 indices may differ from similar indices provided in the 2012 JSC Atomredmetzoloto Annual Report.


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Table 9. Key Financial Indicators of JSC Atomredmetzoloto

million RUB 2011 (recalculated)*

2012 (recalculated)*

2013

TOTAL EQUITY 148,072 131,727 70,032

LIABILITIES

Credits and loans 36,811 30,581 18,583

Reserves 6,746 8,700 6,218

Deferred tax liability 4,206 5,520 4,943

Other accounts receivable 522 1 427

TOTAL Long-term liabilities 48,285 44,802 30,171

Short-term credits and loans and current long-term credits and loans

2,258 8,170 1,595

Accounts payable and accruals 6,109 7,114 7,175

Current income tax liabilities 470 14 34

Accounts payable (other taxes) 826 815 783

TOTAL short-term liabilities 9,663 16,113 9,587

TOTAL LIABILITIES 57,948 60,915 39,758

TOTAL EQUITY AND LIABILITIES 206,020 192,642 109,790

Description 2012 (recalculated)*

2013 2013/2012 change

%2013/2012

Financial stability ratio

Share of the owned capital in the assets 0.68 0.64 -0.05 -7%

Liquidity ratio, unit fraction

Current liquidity ratio 2.3 1.7 -0.6 -26%

Quick liquidity ratio 1.5 0.6 -0.9 -58%

Turnover ratio, days 143 115 -28 -20%

Sales profitability ratio, %

Sales profitability 18.1% 15.4% -2.7% -15%

* 2012 indices may differ from similar indices provided in the 2012 JSC Atomredmetzoloto Annual Report.


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JSC Atomredmetzoloto prepares its consolidated financial statements in accordance with IFRS. Each Holding entity prepares individual accounting state-ments according to Russian accounting standards.

3.2.2. Investment Activities

Investment priorities of the Company are based on the long-term development strategy and aimed at im-plementation of key strategic purposes of ARMZ Ura-nium Holding Co. and Rosatom State Corporation:

■ developing the raw material base and uranium pro-duction in Russia;

■ gaining leadership in uranium mining and process-ing technologies; and

■ diversifying strategic and innovative materials.In 2013, investments in the raw material base and

uranium production development in Russia accounted for the majority of the investment structure, with 90% of funds invested in the main uranium mining assets: JSC PIMCU, JSC Khiagda, and JSC Dalur.

Of the investments, 94% of came from sharehold-ers and internal funds of the Company.

For more details on the investment decision system see 2.2.4.1. Internal Monitoring System.

Figure 16. 2013 Investment Structure, %

In 2013 about RUB 9.1 billion were invested, includ-ing more than RUB 8 billion invested in operated Rus-sian uranium mining assets for:

■ construction and installation at production, infra-structure, and power facilities;

■ industrial facility design; ■ capital and preparation mining; ■ upgrade and modernisation; ■ information and technical support; ■ design and R&D; ■ security; and ■ acquisition of industrial and drilling equipment.

Figure 17. 2011–2013 Trends of Investing in Russian Projects, %

In 2013 most funds were invested in the develop-ment and maintenance of operating facilities.

In 2013 investments in operating facilities increased from 74.5% to 90.2% due to:

■ construction at JSC Khiagda (main building, sorb-ing agent storage, finished product storage, acidu-lation unit, and utilities), and capital and prepara-tion mining works on deposits;

■ replacement of worn-out equipment, upgrade and modernisation, and completion of Mine No. 8 at JSC PIMCU; and

■ geological exploration, capital and preparation min-ing at the Khokhlovskoye field, and modernisation of the LSU of the Ust-Uksyanskaya deposit at the Dalmatovskoye field (JSC Dalur).In addition, geological exploration for the Pav-

lovskoye project was commenced and is expected to become a profitable production complex based on the

other Russian projects

facilities under construction

operated facilities

non-uranium projects

4.61.9

90.23.3

9.674.2

3.912.2

0.7 86.6

10.9 1.8

2011 2012 2013

3% Diversification with strategic

and innovative materials

94% Development of raw material base and urani-um production in Russia

3% Technology leadership


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Pavlovsky lead and zinc field, including a mine and an enrichment plant.

Figure18. Investment by Projects Groups in 2013, %

Figure 19. ARMZ Uranium Holding Co. Key Projects in 2013, %

Long-Term and Mid-Term Investment PrioritiesAccording to the mid-term investment plan, the

2014–2016 JSC Atomredmetzoloto investment pro-gramme is preliminarily evaluated at RUB 20 billion.

2% Infrastructure

6% Other projects

2% Facilities under

construction

90% Operated facilities

6% Other projects

3% Pavlovskoye

39.4% JSC PIMCU

7.2% JSC Dalur

44.4% JSC Khiagda


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* Predicted resources at partially explored ore bodies and ore bodies that have been identified within a field but not explored yet.

Geological Exploration in RussiaIn 2013, geological exploration was conducted at the

deposits of the Khiagda ore field, the Khokhlovskoye field, and at a subsurface site in the Bezymyannaya river area (Novaya Zemlya). The Kaldera project was launched in connection with the search for uranium deposits with high-grade ore within the Streltsovskoye ore field. A total of RUB 665.9 million was invested in geological exploration, which resulted in the reserve increment of 8.5 thousand tons.

Main Measures and Results in 2013 ■ Confirmation of uranium reserves at the Koli-

chikanskoye, Namaruskoye, Koretkondinskoye, Dybrynskoye, and Vershinnoye deposits (Khiagda ore field). Increment of С1+С2 reserves (8.5 thou-sand tons).

3.3.1. Raw Material Base Development

As of January 1, 2014, the uranium raw materi-al base (RMB) of JSC Atomredmetzoloto is 542,000 tons. With its RMB the Company is the second big-gest uranium company in the world. RMB annual growth is ensured through:

■ licensing of new fields, preferably with low produc-tion costs (up to USD 80 per kilo);

■ geological exploration to prepare commercial re-serves for mining; and

■ the search for new deposits, with hydrogenous ones being the priority.

3.3. Production Capital Management

Entity Reserves Р1 resources* Total RMB

JSC PIMCU 108.7 – 108.7

JSC Dalur 9.9 6.5 16.4

JSC Khiagda 39.8 1.4 41.2

JSC EGMK-Project 357.1 – 357.1

JSC Olovskaya MCC 13.5 – 13.5

JSC Gornoye UMC 4.6 – 4.6

JSC Lunnoye 0.4 – 0.4

Total: 534.0 7.9 541.9

Table 10. Reserves and Resources of ARMZ Uranium Holding Co. Entities in Russia as of December 31, 2013, thousand tons

■ Exploration commenced at the Khokhlovskoye deposit under the exploration and extraction li-cense obtained by JSC Dalur in January 2013. Pilot uranium production works were resumed.

■ Initiation of the Kaldera project on prospect evaluation survey within the Streltsovskoye ore field during 2013–2020. Successful completion of stage 1 and further work planning.

■ Commencement of prospect evaluation survey at the subsoil site in the Bezymyannaya river area (Novaya Zemlya), including the Pavlovskoye field.

2014 Plans ■ Further geological exploration and pilot uranium

mining at the Khokhlovskoye field; ■ approval of the survey conditions FS to estimate

Lunnoye reserves;


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Work types Metreage drilled, thousand

metres

Investment amount, million

RUB

JSC PIMCU (Kaldera, stage 1) – 23.5

JSC Dalur (Khokhlovskoye field) 42.8 187.9

JSC Khiagda (deposits of the Khiagda ore field) 9.3 166.3

The First Ore Mining Company (subsoil site in Novaya Zemlya, including the Pavlovskoye field)

8.5 244.3

Total: 60.6 622.0

Table 11. Exploratory Drilling and Financing in 2013

■ further development of the electronic database on Khiagda ore field deposits;

■ further implementation of the Kaldera projects on exploration of uranium deposits within the Streltsovskoye ore field;

■ obtaining an exploration and production license for the Pavlovskoye complex deposit due to its discovery;

■ further prospect evaluation survey on Novaya Zemlya at the subsoil site near the Bezymyannaya river; and

■ commencement of geologic survey at the Pav-lovskoye field to prepare it for commercial ex-ploitation.

3.3.2. Uranium Production Methods

JSC PIMCU uses the subsurface mining method and is now implementing a new R&D project on in situ leaching in blocks.

Vladimir Koshevoy, Urtuysky brown coal pit, JSC PIMCU


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Figure 20. Structure of Uranium Production at JSC PIMCU*

Figure 21. Uranium Production Scheme at JSC Khiagda and JSC Dalur*

JSC Khiagda and JSC Dalur produce uranium with the DISL method, the most eco-friendly and safe way

to produce uranium with a closed production cycle without waste.

* You can find a video on these production methods at the JSC Atomredmetzoloto website: http://www.armz.ru/ore-main.php.

Добыча руды

Ore mining

Tailings

Uranium oxide concentrate

Rich eluate processingLeaching, sorption, and desorption

Ore reduction

Heap leachingX-ray separation Sorption and desorption

Hydrometallurgical process

Ore storage yard

Ore check point (OCP)Ore haulage and surfacing

Ore excavation and backfillDrilling and blasting

Production well drilling, construction and piping

Ore body acidulation

and leaching

Loading and unloading product

solutions for sorption

Solution processing, sorption and desorption

SedimentationUranium

concentrate

Recycled solutions + acid

Tailings


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3.3.3. Uranium Production by JSC Atomredmetzoloto Russian Entities

In 2013 the main task of the Holding entities was providing for Rosatom needs in raw materials that car-ries out its ambitious NPP construction programme in Russia and actively increases its presence abroad.

3.3.3.1. JSC PIMCU, Krasnokamensk, Transbaikal Territory

2013 Results ■ 2,133 tons of uranium were produced (+132 tons

compared to 2012 figures); ■ JSC PIMCU put into operation 6 new stopes and 3

half-stopes. This increased prepared reserves by 665 thousand tons of ore (1,030 tons of uranium);

■ a 3D geological survey model of Mine No. 8 was prepared;

■ Mine No. 8 is at the last development stage with an estimated output of 370 thousand tons of ore per year. The development shall be finished in 2014;

■ 3,480 tons of coal were mined, which is 416 tons more than in 2012;

■ dispatch of coal by third parties increased by 60% year-on-year;

■ the administration building of the Urtuyskoye sur-face mine office was completed;

■ live steam piping of the TPP phase 2 was replaced; and ■ the pilot hydrometallurgical shop was reconstruct-

ed and put into operation.

2014 Plans ■ It is planned to produce 1,950 tons of uranium (-183

tons compared to 2013 figures); ■ further geological exploration according to the Mid-

Term Development Programme of JSC PIMCU for 2013–2020;

■ further implementation of the Kaldera projects on exploration of uranium deposits within the Streltsovskoye ore field;

■ to shrink production volume at Mine No. 2 due to low reserve content and high production costs;

■ to increase coal mining volumes up to 4,160 thou-sand tons;

2011 2012 2013

Production volume, tons 2,191 2,001 2,133

Uranium reserves, thousand tons 113.1 111.06 108.7

Table 12. Production Volume and Uranium Reserves in 2011–2013, JSC PIMCU

■ to introduce a mobile integrated crushing unit to process unpayable ore;

■ to commence construction of mine water treatment facilities (MWTF) phase 1;

■ to increase the capacity of operating tailing storages; ■ to complete the entire infrastructure at Mine No. 8; ■ to further modernise stowing complexes of operat-

ing mines; and ■ to increase operational efficiency and reduce costs.


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Mid-Term Plans ■ Further implementation of the Kaldera projects

on exploration of uranium deposits within the Streltsovskoye ore field;

■ to implement the new method of in situ leaching in blocks;

■ to change over to scheduling output on the basis of 3D mine models;

■ to increase annual uranium production up to 2,500 tons;

■ to increase coal production volumes and the share of products sold to third-party companies;

■ to implement a stationary integrated crushing unit to produce more uranium by heap (percola-tion) leaching;

■ to complete MWTF construction; ■ to start using additional tailings storage capac-

ities; ■ to finish preparation for in situ leaching in blocks; and ■ to increase operational efficiency and reduce costs

under the Efficiency Enhancement Programme.

3.3.3.2. JSC Dalur, Uksyanskoye Settlement, Kurgan Region

2013 Results ■ 562 tons of uranium were produced (+33 tons

compared to 2012 figures); ■ an exploration and production license for the

Khokhlovskoye deposit was obtained; ■ geological exploration was commenced at the

Khokhlovskoye deposit; ■ pilot work was resumed at the Khokhlovskoye

deposit and pilot site facilities were put into op-eration: product and recycled solution settlers, acidulation unit, and switchboard room;

■ products were delivered in accordance with ob-ligations;

■ further transfer to finished products was con-ducted according to the intermediate “core” ASTM С967-08 standard;

■ pilot research project to explore the possibility of ancillary REE and scandium mining in the form of bulk concentrate from product solutions was launched;

■ further development of the Rosatom Production System occured;

■ modernisation of the local sorption unit of the Ust-Uksyanskaya deposit at the Dalmatovskoye field was completed; the unit can process product solutions at the rate of up to 1,100 cu. m per hour;

■ topographical surveying and environmental en-gineering were performed under the FTP Recla-mation of Land Polluted in the Course of Geolog-ical Exploration and Pilot Operations at JSC Dalur (Uksyanskoye, Dalmatovo Area, Kurgan Region).

2014 Plans ■ It is planned to produce 570 tons of uranium (+8

tons as compared to 2013 figures); ■ products will be delivered in accordance with ob-

ligations; ■ further geological exploration and pilot opera-

tions at the Khokhlovskoye field will take place; ■ further transfer to finished products was con-

ducted according to the intermediate “core” ASTM С967-08 standard; and

■ further implementation of the Rosatom Produc-tion System (3 projects, standardisation and vis-ualisation of work stations).

Mid-Term Plans ■ To continue geological exploration at the

Khokhlovskoye field; ■ to get approval of the permanent survey condi-

tions FS and the report on Khokhlovskoye re-serves estimate;

■ step-by-step production growth achieving 590 tons of uranium per year by 2016;

■ to develop ancillary REE and scandium concen-trate production; and

■ transformation of the Khokhlovskoye pilot plant into a local sorption unit and commencement of commercial production in 2018.

2011 2012 2013

Production volume, tons 535 529 562


Table 13. Production Volume and Uranium Reserves in 2011–2013, JSC Dalur


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3.3.3.3. JSC Khiagda, Bagdarin Settlement, Buryatia

2013 Results ■ 440 tons of uranium were produced (+108 tons

compared to 2012 figures); ■ at the Khiagda field, blocks at deposit No. 7 were

put into operation, and deposit No. 3 was tapped and hooked up;

■ phase 1 of process complex and infrastructure of the main production site was completed;

■ geological exploration was completed and reserves were confirmed at the Dybrynskoye, Koretkondin-skoye, Kolichikanskoye, and Vershinnoye fields; and

■ follow-up exploration at the Khiagda field was com-pleted.

2014 Plans ■ It is planned to produce 443 tons of uranium (+3 tons

as compared to 2013 figures); ■ acidulation of deposit No. 3 at the Khiagda field; ■ exploration of the Tetrakhskoye subsurface water

deposit; ■ completion of the basic database for the deposits of

the Khiagda ore field;

2011 2012 2013

Production volume, tons 266 332 440


Table 14. Production Volume and Uranium Reserves in 2011–2013, JSC Khiagda

■ certification of DSE for the Istochnoye field with the State Examination Central Administration (Glav-gosekspertiza);

■ completion of phase 2 of the sulphuric acid ware-house and fire extinguishing pump station, con-struction of a package warehouse with a painting shop and a sodium nitrite storage and preparation site;

■ pre-commissioning and start-up of the power supply package; and

■ to purchase and install three 1.0 MWt back-up diesel power stations at the electric substation.

Mid-Term Plans ■ To achieve full load of the pilot plant (450 tons of

uranium per year); ■ to increase uranium production volumes by put-

ting into operation (after 2017) an industrial plant to achieve its full capacity of 1,000 tons of uranium per year in 2018;

■ to put into operation well-prepared infrastructure facilities; and

■ to complete most infrastructure facilities and per-form capital and preparation mining to increase production starting from 2017.

3.3.4. Uranium Production by the Entities of Uranium One Inc.

Key Production Indices

Asset 2011 2012 2013

JV Betpak-Dala LLP (South Inkai) 1,083.8 1,309 1,420.1

Karatau LLP 1,087.3 1,067.6 1,057.5

JV Betpak-Dala LLP (Akdala) 780 766.5 714.0

Table 15. Uranium Production by the Entities of Uranium One Inc., tons*

* With regard to the stake in the relevant entity.


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Asset 2011 2012 2013

JV Akbastau LLP 552.7 601.3 749.5

JV ZARECHNOYE LLP 364.6 467.8 462.3

Kyzylkum LLP 128 174.6 225.7

Willow Creek 82.6 239 361.6

Honeymoon* 19.6 84.6 94.8

Total 4,098.6 4,710.4 5,086.3*

* In 2013 the project was preserved for an indefinite time due to the unfavourable market situation.

** The values are rounded, and the total value may be slightly different from the actual sum of separate values.

In 2013 Uranium One Inc. (taking distributed products into account) increased its uranium production volume by 8% up to 5,086.3 tons (about 13.2 million pounds of ura-nium oxide).

Uranium One Inc. proved that it was one of the most effective companies in the industry; average production costs in 2013 stayed at the level of USD 16 per pound of uranium oxide.

Asset Measured Indicated Inferred Total

JV Betpak-Dala LLP (Akdala) * 1,394 0 4,041 5,435

JV Betpak-Dala LLP (South Inkai) * 7,570 13,341 18,877 39,788

Karatau LLP * 9,677 21,619 31,385 62,681

JV Akbastau LLP * 15,580 7,624 15,426 38,630

JV ZARECHNOYE LLP * 578 3,146 2,235 5,959

Kyzylkum LLP * 525 1,896 5,382 7,803

Honeymoon 0 4,153 0 4,153

Willow Creek* 0 6,461 54 6,515

Mkuju River** 31,579 16,348 10,562 58,489

Total 66,903 74,588 87,962 229,453

Table 16. Raw Material Base of Uranium One Inc., as of December 31, 2013

* With regard to the stake in the relevant entity.

** Total raw material base of the project.

The significant growth of the uranium raw ma-terial base, with its total size as of December 31, 2013 being 229.453 thousand tons, can be in the

first place explained through its overestimation at mines in Karatau, Akbastau, and South Inkai on the basis of 3D models.


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Entity MineCategory

B+C1 C2 B+C1+C2 P1 Total

JV Betpak-Dala LLP** Akdala 756 4,108 4,864 1,029 5,893

South Inkai 9,050 24,609 33,659 21,302 54,961

Karatau LLP** Karatau 4,904 22,870 27,774 0 27,774

JV Akbastau LLP** Akbastau 6,056 14,624 20,680 21,501 42,182

Kyzylkum LLP** Kharasan 1,266 8,330 9,596 16,258 25,854

JV ZARECHNOYE LLP** Zarechnoye 4,994 2,146 7,139 11,305 18,444

South Zarechnoye 0 709 709 2,285 2,994

Total 27,025 77,396 104,421 73,679 178,100

Table 17. Raw Material Base of Uranium One Inc. Entities in Kazakhstan as of January 1, 2014, tons of uranium*

* Based on the 8GR official report; the values are rounded, and the total value may be slightly different from the actual sum of separate

values.

** With regard to the stake in the relevant entity.

3.3.5. New Projects

3.3.5.1. Beryozovoye-Gornoye, JSC Gornoye UMCIn 2013 no exploration was carried out at the Beryozo-

voye deposit. Confirmed uranium reserves (С1+С2) were 4,613 tons, with an average uranium content of 0.278%.

The Beryozovoye-Gornoye project is aimed at the establishment of a profitable entity for small mine de-velopment based on JSC Gornoye UMC, with an an-nual capacity of up to 500 tons possibly increased up to 1,000 tons by using the raw material base of the nearby small deposits in the Transbaikal Territory, Buryatia, and the Khabarovsk Region.

The purpose is the industrial development of the Beryozovoye and Gornoye deposits to produce urani-um concentrate (yellowcake) and the later production of uranium oxide.

The Gornoye project was suspended by the deci-sion of the Company’s Investment Committee: at the current stage the project bears high risks because of the current market situation and possible significant increase of capital and operating expenses.

2013 Results ■ engineering survey was completed and a report was

prepared with all the data required for the pilot heap

leaching plant project at the Beryozovoye deposit; ■ part of the design documentation was prepared for

the pilot heap leaching plant project at the Beryozo-voye deposit; and

■ license conditions for the Gornoye field subsoil use were changed (adjusted according to the beginning of mine development).


68

2014 Plans ■ To finish the project for the pilot heap leaching plant

project at the Beryozovoye deposit; and ■ to submit the project for the pilot heap leaching

plant project at the Beryozovoye deposit for state examination.

Mid-Term Plans ■ To obtain state examination approval for the project

for the pilot heap leaching plant project at the Bery-ozovoye deposit;

■ to perform pilot operations (up to 600 tons of ore) at the Beryozovoye deposit according to the Rosnedra SCMR decision;

■ to prepare and approve of, in conjunction with the Rosnedra SCMR, the permanent survey conditions FS and the reserve estimation report for the Gor-noye and the Beryozovoye fields based on pilot op-eration outcomes at the Beryozovoye field;

■ to develop a facility project on the basis of the per-manent survey conditions FS and the reserve esti-mation report; and

■ to develop the Gornoye and the Beryozovoye fields on the Beryozovoye industrial site.

3.3.5.2. Olovskoye, JSC Olovskaya MCCConfirmed uranium reserves (С1+С2) were 13,535

tons, with an average uranium content of 0.076%.The purpose of the Olovskoye project is to establish

a uranium mining facility for the development of the Olovskoye deposit in the Transbaikal Territory.

At present the Olovskoye project is suspended ac-cording to the decision of the Company’s Investment Committee. No co-investors were found for this project.

2013 ResultsLicense conditions for the Olovskoye field subsoil

use were changed (adjusted according to the begin-ning of mine development).

2014 PlansThe Balance Committee of JSC Atomredmetzoloto

decided to lease the subsoil use license and close JSC Olovskaya MCC down.

3.3.6. Other Entities

3.3.6.1. Geological Survey CompaniesCJSC RUSBURMASH is an integrated geological

survey company with an extensive drilling service that offers design for operation implementation of solid minerals geologic survey projects in Russia, Asia, and Africa.

For more details see 2.3.1. CJSC RUSBURMASH Activities.

3.3.6.2. Engineering CompaniesJSC VNIPIpromtechnologii is a leader in designing

mineral resources producing facilities, R&D, and ex-perimental and pilot work in the uranium industry.

For more details see 2.3.2. JSC VNIPIpromtech-nologii Activities.

3.3.6.3. Service Companies

ARMZ Service LLCServices Rendered by the Company

Supplies of raw materials, materials, and equip-ment to ensure continuous production at the Hold-ing’s uranium production entities.

2013 Key Results ■ Participation in procurement for Russian entities

of the Holding to reduce procurement costs; ■ increased thermal coal supplies to the Urtuysky

Section (JSC PIMCU) in Russia; ■ introduction of tank containers to replace tank

cars for delivering sulphuric acid from JSC PIM-

Area of activities Revenue (excluding VAT)

Russian entities 3,958,178

Delivery of goods to Kazakhstan 607

Other goods and services for third parties 25,818

TOTAL 3,984,603

Coal sales (under an agency scheme) 1,058,538

Table 18. 2013 ARMZ Service LLC Key Performance Indicators


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CU to JSC Khiagda (without pouring the acid from one container to another) to optimise and reduce transportation costs; and

■ restructuring and rebranding ARMZ Service LLC under the 2013 procurement restructuring scheme of ARMZ Uranium Holding Co. Under Ro-satom’s decree, ARMZ Service LLC was included in the list of authorised procurement companies of the nuclear industry. In 2014, ARMZ Service LLC ceased to participate in procurement procedures; however it renders services of organising and car-rying out procurement for the Mining Division.

2014 and Mid-Term Plans ■ To render services on organising and carrying out

procurement procedures; ■ to ensure procurement feasibility and efficiency at

the Mining Division and a competitive environment in the course of bidding, and to increase procure-ment economic efficiency;

■ to terminate single supplier procurement and sup-plies through intermediaries;

■ to terminate supplies through intermediaries and invite manufacturers to bid;

■ to enter into long-term supply contracts with prices fixed for 2–3 years and prompt delivery;

■ to increase the number of procurement procedures via OJSC Atomkomplekt due to proper scaling (put-ting more consignments together and introducing category management); and

■ to participate in the diversification of ARMZ Urani-um Holding Co.’s production activities.

3.3.7. Non-Nuclear Projects

Non-nuclear projects ensure business diversifica-tion.

For more details see 2.1.4. Long-Term Strategy and Current Status of the Company.

3.3.7.1. PavlovskoyeThe purpose of the Pavlovskoye project is to es-

tablish a profitable industrial complex based on


70

a silver-bearing lead and zinc ore deposit in Pav-lovskoye (Bezymyansky ore cluster, Yuzhny Island, Novaya Zemlya, Arkhangelsk Region) with an ex-tensive mineral base of over 37 million tons of ore (category C1+C2). The holder of the subsoil use li-cense is The First Ore Mining Company.

2013 Results ■ The prospect evaluation survey license was al-

tered (prolonged to 2018); and ■ a field prospect evaluation survey was carried

out at the Bezymyansky ore cluster (also at the Pavlovskoye deposit); 8,516 m of prospecting and

appraisal wells were drilled. The data is under processing. Following the prospect evaluation survey, the RMB increased by 15–20%.

2014 Plans ■ To complete the prospect evaluation survey at the

licensed site; ■ to obtain a license for geological survey and natural

resources exploration and production at the Pav-lovskoye deposit; and

■ to perform geological exploration at the Pavlovskoye deposit.

Tamara Balashova, Chemistry Engineer at the Chemical Analysis Laboratory of the In Situ Leach-ing Shop, JSC Khiagda


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3.3.8. Rosatom Production System: Complying with Product Quality Requirements

3.3.8.1. Implementing RPS ProjectsThe introduction of the Rosatom Production Sys-

tem at the Holding entities started in October 2011. In 2013 the work on RPS implementation focused on the application of the RPS culture and philosophy at the Holding entities and identification and promotion of production system leaders.

2013 Results ■ 791 employees were involved in the implementation

of various parts of the RPS; 54 employees were rec-ognized as RPS leaders;

■ under the project Development of Mining Labour Productivity at Mine No. 8 of JSC PIMCU, horizon-tal metreage achieved 160 m per month (compared to the earlier result of 48.7 m/month, this is a more than a threefold growth);

■ the number of trips to transport coal was reduced by nearly 8,000 due to switching over to BelAZ vehi-cles; the load was increased by 8.5 tons; 57.8 more thousand tons of coal were transported than initially planned; and the annual economic effect was RUB 17.3 million (project Optimisation of Coal Production and Logistics of the JSC PIMCU Coal Mine);

■ the Leaders of Changes, the RPS leader identifica-tion and promotion system, was implemented suc-cessfully on the basis of self-promotion (54 leaders as compared to 19 leaders year-on-year);

■ the total economic effect of the measures taken was RUB 108 million;

■ JSC Dalur unified the procedure of sulphuric acid acceptance at the railway base and its delivery to on-site storages at the CPS and the LSU;

■ JSC Khiagda optimised the system of TSC prepara-tion and rejection;

■ CJSC RUSBURMASH took measures to increase performance and reduce costs, achieving the total economic effect of RUB 26.9 million.

2014 PlansIn 2014, the Holding plans to continue with the RPS

implementation in three basic directions: ■ production; ■ efficiency of business processes; and ■ administrative efficiency.

3.3.8.2. Integrated Power Saving and Enhanced Power Efficiency Programme

JSC Atomredmetzoloto pays a lot of attention to en-hancing production power efficiency and power saving.

3.3.7.2. Development of REE ProductionUnder this project, an REE production complex will

be established based on existing industrial infrastruc-ture, personnel resources, and the technological com-petencies of the Mining Division.

2013 Results ■ The Company identified the prospects of the poten-

tial establishment of an industrial REE processing complex based on JSC PIMCU in the form of indus-trial cooperation with third-party investors; and

■ at JSC VNIPIpromtechnologii a subdivision was created specialising in the development of REE production methods (also under Sub-Pro-gramme No. 15 for Development of Rare and Rare Earth Metal Industry included in the State Programme for Industry Development and Com-petitive Growth).

2014 Plans ■ Together with third-party investors, to develop ba-

sic conditions for establishing a pilot REE produc-tion based on JSC PIMCU; and

■ to carry out R&D and experimental development of REE production methods.

3.3.7.3. Ancillary REE MiningThe Ancillary REE Mining project outlines ancillary

production of REE and scandium bulk concentrate from uranium product solutions produced at JSC Dalur and JSC Khiagda.

2013 Results ■ A pilot plant was installed and put into operation

at the JSC Dalur production site that is used for low-tonnage testing of the ancillary scandium con-centrate production method; and

■ the Company signed a letter of intent with a poten-tial investor for the development of ancillary REE and scandium mining at JSC Khiagda.

2014 Plans ■ To complete the pilot production and register the

right to the ancillary scandium concentrate produc-tion method tested at JSC Dalur;

■ to develop a project for, establishing a pilot scandi-um concentrate production plant at JSC Dalur; and

■ to develop a project for and commence building of, a pilot ancillary REE and scandium concentrate production plant at JSC Khiagda.


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Year EntityCoal Fuel oil Natural gas Electric power Car fuel Diesel fuel

TJ thousand RUB

TJ thousand RUB

TJ thousand RUB

TJ thousand RUB

TJ thousand RUB

TJ thousand RUB

2011 JSC Atomredmet-zoloto

0 0 0 0 0 0 11 4,458 0 0 0 0

JSC PIMCU 20,484 529,538 33 8,672 0 0 5,874 669,997 17 11,777 207 123,161

JSC Dalur 0 0 0 0 46 4,432 280 84,739 10 5,954 20 11,241

JSC Khiagda 20 3,493 0 0 0 0 114 34,342 5 3,334 31 22,905

Total: 20,504 533,031 33 8,672 46 4,432 6,279 793,536 32 21,065 258 157,307


0 0 0 0 0 0 12 4,069 7 5,539 0 0

JSC PIMCU 20,145 555,760 33 10,833 0 0 6,010 715,132 20 16,231 230 171,272

JSC Dalur 0 0 0 0 46 4,738 292 85,163 7 4,798 16 10,376

JSC Khiagda 24 3,417 0 0 0 0 184 48,106 4 3,978 34 33,234

Total: 20,169 559,177 33 10,833 46 4,738 6,498 852,470 38 30,546 280 214,882


0 0 0 0 0 0 8 2,800 4 3,255 0 0

JSC PIMCU 19,253 485,700 32 11,300 0 0 6,082 811,300 22 17,778 250 186,208

JSC Dalur 0 0 0 0 41 4,753 311 100,482 7 4,923 16 11,744

JSC Khiagda 30 4,978 0 0 0 0 242 70,031 6 4,658 38 35,972

Total: 19,283 490,678 32 11,300 41 4,753 6,643 984,613 39 30,614 304 233,924

Table 19. Power Consumption by Main Industries Entities of ARMZ Uranium Holding Co.

Figure 22. Power Saving and Efficiency Indices for 2011–2013, %

JSC PIMCU is the biggest power consumer within the Holding — 410 MWt of electric power and 1,076 Gcal of thermal power, which accounts for 95% of the fixed power consumption for JSC Dalur and JSC Kh-iagda.

2013 ResultsIn 2013 the Company consumed 98,831 litres of AI

95 and AI 92 gasoline to the total amount of RUB 3.26 million.

The Company rents its office premises. Under the office rent agreement, consumed power is included in the common list of municipal services and is paid for on a monthly basis under a separate bill among oth-er services. Within the reporting period, the Company used about 790,000 kWh of electric power to the total amount of RUB 2.8 million.

In 2011–2013 in general, savings due to reduced power consumption by the Holding S&A was RUB 290 million (in monetary terms) under comparable con-sumption conditions.

2014 PlansJSC PIMCU

■ To continue construction and installation of the au-tomated eclectic power information and metering system (AEPIMS);

■ pre-commissioning and putting into operation of the electric power metering system (automated technical and commercial eclectic power informa-tion and metering systems (ATEPIMS/ACEPIMS));

Dalur PIMCU Khiagda TOTAL ARMZ

18.5

11.4

35.5

12.9

2011 plan — 10%

Actual for ARMZ S&A, % Plan by year, %


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Year EntityCoal Fuel oil Natural gas Electric power Car fuel Diesel fuel

TJ thousand RUB

TJ thousand RUB

TJ thousand RUB

TJ thousand RUB

TJ thousand RUB

TJ thousand RUB


0 0 0 0 0 0 11 4,458 0 0 0 0

JSC PIMCU 20,484 529,538 33 8,672 0 0 5,874 669,997 17 11,777 207 123,161

JSC Dalur 0 0 0 0 46 4,432 280 84,739 10 5,954 20 11,241

JSC Khiagda 20 3,493 0 0 0 0 114 34,342 5 3,334 31 22,905

Total: 20,504 533,031 33 8,672 46 4,432 6,279 793,536 32 21,065 258 157,307


0 0 0 0 0 0 12 4,069 7 5,539 0 0

JSC PIMCU 20,145 555,760 33 10,833 0 0 6,010 715,132 20 16,231 230 171,272

JSC Dalur 0 0 0 0 46 4,738 292 85,163 7 4,798 16 10,376

JSC Khiagda 24 3,417 0 0 0 0 184 48,106 4 3,978 34 33,234

Total: 20,169 559,177 33 10,833 46 4,738 6,498 852,470 38 30,546 280 214,882


0 0 0 0 0 0 8 2,800 4 3,255 0 0

JSC PIMCU 19,253 485,700 32 11,300 0 0 6,082 811,300 22 17,778 250 186,208

JSC Dalur 0 0 0 0 41 4,753 311 100,482 7 4,923 16 11,744

JSC Khiagda 30 4,978 0 0 0 0 242 70,031 6 4,658 38 35,972

Total: 19,283 490,678 32 11,300 41 4,753 6,643 984,613 39 30,614 304 233,924

Table 19. Power Consumption by Main Industries Entities of ARMZ Uranium Holding Co.

Figure 22. Power Saving and Efficiency Indices for 2011–2013, %


14.5

17.3

30.7

17.5

2012 plan — 14.5%


19.0

13.6

2013 plan — 20%

13.017

.5


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■ to install and put into operation modernised relay protection and emergency control automatics at the 110 and 220 AL; and

■ to carry on work on the frequency-regulated drive at HMPs and TPPs.

JSC DalurTo purchase 11 FCD stations in the first half of the

year.

JSC KhiagdaTo calculate economic efficiency and perform the

following design works: ■ reconstruct the forced draft system of the main in

situ leaching shop; ■ reconstruct the lighting at the CPB and six deposits

(installation of power saving SD-LED40); and ■ to install four automatic voltage control points

(AVCP) type VDT/VR-32.

3.3.8.3. Complying with Product Quality Requirements

ARMZ Uranium Holding Co. products are consumed by the JSC Chepetsky Mechanical Plant and JSC Sibe-rian Group of Chemical Enterprises.

Products manufactured by JSC PIMCU, JSC Khiag-

da, and JSC Dalur comply with TU (Technical Specifi-cations) 95 1981–2009 for Uranium Oxide Concentrate and TU (Technical Specifications) 95–2002 for Ammo-nium Polyuranate (Yellowcake).

In 2013, all products manufactured were in compli-ance with technical specifications and there were no claims from the consumers of otherwise.

3.4. Human Capital Management

3.4.1. Management System

The personnel management system is based on the following principles:

■ strict compliance with the Russian Labour Code; ■ integral and socially oriented personnel policy; ■ increase of labour productivity; ■ priority and career development of own employees.

3.4.2. KPI System

ARMZ Uranium Holding Co. uses a KPI personnel performance management system. Introduction of

KPI was one of the factors that resulted in increased labour productivity. It allows measuring performance as well as establishing performance criteria for the company in general, for each subdivision, and for each employee.

Employees’ salaries depend on their productivity and compliance with KPI. KPI for the head of the Holding are established with consideration of stra-tegic objectives and KPI. These indices are further decomposed into structural subdivision KPI and separate employee KPI.

Collective KPI The Rosatom CEO can set a collective KPI for all employees of the Corporation entities. In this case the target KPI, the lower and upper limits of the collective KPI, and the KPI type will be the same for all KPI roadmaps and will be cascad-ed from the roadmap of the CEO’s KPI.

Decomposed KPI KPI from the head’s roadmap.KPI achievement by subordinate managers shall ensure KPI achievement by su-perior managers (KPI decomposition scheme).

Functional KPI KPI developed by the functional manager of the superior company (Rosatom State Corporation).

Table 20. Types of KPI


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Figure 23. Decomposition Principle

2013 ResultsIn 2013, a collective KPI named Adjusted Free Cash

Flow was introduced for all Holding employees.

Results of Director General’s KPI System Application*

KPI title and unit of measurement Target value Actual value

Adjusted Free Cash Flow at Rosatom State Corpora-tion, billion RUB

157.27 174.5

Involvement, % 55 55

Adjusted Free Cash Flow at JSC Atomredmetzoloto, billion RUB

4.30 5.9

Unit cost per ton of uranium, thousand RUB/ton 3,518 3,337

Reduction of uranium bearing reserves at the NFC IS in general, RUB billion

10.7 12.2

Labour productivity, million RUB/person 2.69 2.84

Lost-time injury frequency rates (LTIFR) 10% decrease as com-pared to the reference period

achieved

Table 21. 2013 JSC Atomredmetzoloto Target KPI

KPI of unit directors




KPI of deputy company directors

KPI of deputy company directors

KPI of company director

* Director General’s KPI are approved by the Board of Directors


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JSC Atomred-

metzoloto

JSC PIMCU JSC Dalur JSC Khiagda JSC VNIPI-

promtechnologii

CJSC RUSBUR-

MASH

TOTAL

2014 PlansIncrease the role of KPI in the personnel motivation

system.

3.4.3. Human Capital Features

Number of EmployeesThe 2013 average headcount demonstrated a 5.7%

year-on-year increase (627 people) and amounted up to 11,588 people. The biggest part of the increase is due to JSC PIMCU (560 people or 6.4%) and JSC Kh-iagda (73 people or 21.7%) and resulted from produc-tion expansion.

Figure 24. Average Headcount Dynamics in 2011–2013, people

Nikolay Shirokorotov, Deputy Head of the Mining Machinery Equipment Maintenance, underground uranium mine No. 1, JSC PIMCU

2011 2012 2013

11,5

88

10,9

61

10,4

53

787

757

723

409

442

479

409

336

301

442

437

433

9,31

3

8,75

3

8,29

4

228

236

223

Paramilitary mine rescue team, JSC PIMCU


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Moscow Kurgan Region Irkutsk Region Transbaikal Territory Republic of

Buryatia

Figure 25. Average Headcount Dynamics in Main Regions of Operation, people

Similar dynamics can be seen in the headcount by regions of operation. The number of employees increased in the Transbaikal Territory and Buryatia, where JSC PIMCU and JSC Khiagda operate.

Within the reporting period only 66 employees of all S&A worked part-time, which is less than 1%.

340 people (3%) worked under a fixed-term employ-ment contract.

Figure 26. ARMZ Uranium Holding Co. Personnel by Employment Contract and Employment Conditions, people

Figure 27. ARMZ Uranium Holding Co. Personnel by Gender in 2011–2013, people

Gender and AgeIn 2013, 8,396 men and 3,249 women worked at ARMZ Uranium Holding Co.

2011 2012 2013

770

749

704

567

567

563

134

137

127

8,67

4

9,07

0

9,69

5

308

438

499

Employed under an indefi-nite-term employment contract

Employed under a fixed-term employment contract

10,288

38011,445

405

11,305

340

2011 2012 2013

10,668 11,850 11,645

2011 2012 2013

71% (7,521)

Men

29%(3,147) Women

72% (8,571)

Men

28%(3,279) Women

72% (8,396)

Men

28%(3,249) Women


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Figure 29. Turnover by Gender in 2011–2013, %

Figure 30. Number of Dismissed Employees by Regions of Operation, people

Personnel by AgeIn 2013 the percentage of employees by age showed very little changed.

Figure 28. ARMZ Uranium Holding Co. Personnel by Age in 2011–2013, people

Personnel TurnoverThe general turnover within the Holding in 2013

went up from 17% to 23%. A 13% turnover increase at JSC Atomredmetzoloto is related to organisation changes in the Holding (restructuring of the Rosatom

Mining Division). At JSC VNIPIpromtechnologii, the turnover went up from 11% to 20% due to retirement. The JSC Khiagda personnel policy in 2012–2013 made the company a more attractive employer, which result-ed in reducing the turnover from 43% down to 26%.

Under 35 36 to 50 Over 50

28% (2,995)

25% (2,952)

24% (2,797)

41%(4,401)

43%(5,097)

43%(5,062)

31% (3,272)

32% (3,801)

33% (3,786)

Men

Women17.3

6.1

2011 2012 2013

16.5

5.5

18.9

3.8

22,7 22 23,4

214

197

172

Moscow Kurgan Region Irkutsk Region Transbaikal Territory Republic of

Buryatia

2011 2012 2013

853129 284760

2,46

1

2,30

8

2,02

3

927867

2011 2012 2013


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3.4.4. Remuneration System

The Single Unified Remuneration System (SURS) was introduced at all JSC Atomredmetzoloto entities and established a common approach to remuneration payments.

Table 22. Expenses and Deductions Related to Remuneration at ARMZ Uranium Holding Co. Entities in 2011–2013, million RUB

2011 2012 2013

Payroll 4,903 6,376 7,346

Personal income tax 684 771 917

Insurance contributions to payroll

1,476 1,532 1,940

Figure 32. Remuneration Amount at ARMZ Uranium Holding Co. Entities in 2011–2013, RUB

JSC PIMCU JSC Dalur JSC Khiagda JSC VNIPIpromtech-

nologii

CJSC RUSBURMASH

29,5

88

36,6

59

42,6

58

27,9

66

31,8

45

35,0

86

43,2

32

52,6

31

55,3

47 72,8

00

73,7

50

96,5

51

50,0

22

58,0

24

60,8

49

Figure 31. Number of Dismissed Employees by Gender, people

2011 2012 2013

Men

Women

1,653

698

1,781

2,323

880557


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Figure 33. Minimum Salary to Entry Salary in Regions of Operation, RUB*

* A region of operation is a subject of the Russian Federation where the Holding operates: Moscow, the Transbaikal Territory, the Kurgan Region,

the Republic of Buryatia, and the Irkutsk Region.

The average growth of the average salary was 13.5%.

The minimum salary at all the entities is higher than the minimal income threshold in the regions of operation.

2014 PlansFurther harmonisation of the SURS.

3.4.5. Social Policy of the Company

In 2013 the Integrated Industry Social Policy of Ro-satom and its Entities was introduced for all entities of the Holding.

Social payments to employees increased from RUB 177 million in 2012 to RUB 254 million in 2013.

The Company offers the following social benefits: voluntary medical insurance, sickness and accident insurance, health resort treatment and vacations, housing improvement assistance, retirement bene-

Dmitry Dementyev, Head of Underground Mine Area No. 8, JSC PIMCU

Moscow Kurgan Region Irkutsk Region Transbaikal Territory Republic of Buryatia

JSC PIMCU JSC Dalur JSC Khiagda JSC VNIPIpromtech-nologii

CJSC RUSBUR-MASH

2011 2012 2013 2011 2012 2013 2011 2012 2013 2011 2012 2013 2011 2012 2013

2011 2012 2013 2011 2012 2013 2011 2012 2013 2011 2012 2013 2011 2012 2013

4,61

1

6,49

54,

611 7,28

96,

782

7,28

9

5,11

4

7,31

2

5,68

3 8,46

2

6,20

7

8,46

2

10,7

37 14,0

3811

,700 14

,038

12,2

00 14,2

12

5,11

414

,038

5,68

314

038

6,20

7

14,2

12

4,61

1 /

5,33

8

9,71

94,

611

/ 6,

693

11,0

886,

782

/ 6,

693

13,1

65

10,7

3716

,200

11,7

00 /

4,6

11

12,0

00

12,2

00 /

6,7

8211

,000

– – – – – –

4,61

114

,038

4,61

1

14,0

385,

205

14,2

12

4,61

114

,038

4,61

1

14,0

386,

782

14,2

12

5,33

8

14,0

386,

693

14,0

38

6,69

3

14,2

12

Region minimum

Entity minimum


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Figure 34. Social Payments to Employees, %fits (non-state), social support, support for veterans and pensioners, meals, awards, sports and cultural events.

In September 2013, ARMZ Uranium Holding Co. mounted sports competitions at the Serebryany Bor beach (Moscow) for its employees and personnel of its entities: employees of JSC PIMCU, JSC Dalur, ESK ARMZ (ARMZ Service LLC), CJSC RUSBURMASH, JSC EGMK-Project, and JSC VNIPIpromtechnologii took part in them. The total amount of participants was 196 employees. It was the first time a corporate sports competition had been organised.

The Holding carries out a non-state pension benefit programme.

It is carried out in compliance with Russian law. Non-state pension benefits are financed by the em-ployee (0.8% to 3.3% of the salary depending on age) and the employer (1.5% to 10.0% of the employee’s salary). At JSC PIMCU, 1,083 people participate in this programme. In 2013, 17 retired participants of the programme started receiving their non-state pensions. Over RUB 35 million was transferred to employer accounts. JSC Dalur made pension trans-fers to 225 retired employees, amounting up to RUB 2 million.

2014 Plans:To continue implementation of the Integrated In-

dustry Social Policy.

16.1% VME

2.3% Voluntary life and accident insurance

21.3% Retirement benefits

15.9% Sports and cultural events

4.8% Financial

assistance

12.7% Compensa-

tion for travel expenses

18.4% Additional

payment upon retirement

1.8% Presents for anniver-

saries, professional holidays, and the New

Year

6.5% Compensation for rented accommodation

0.2% Compensation of travel vouchers


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Employee value Sports competitions were mounted for teams from JSC Atomredmetzoloto, JSC PIMCU, JSC Dalur, ESK ARMZ (ARMZ Service LLC), CJSC RUSBURMASH, JSC EGMK-Project, and JSC VNIPIpromtechnologii. A separate sports team was formed including children of the Holding personnel to participate in spe-cial sports games for children, including a family competition. The children’s programme included the following games: futsal, volleyball, ping-pong, chess, darts, racing, and kettlebell lifting.

Internal communications

Four Personnel Information Days were organised. Each Information Day covered an average of 7,000 people.

Professional development and training

Training sessions and modules by functional directions were mounted for JSC Atomredmetzoloto and S&A employees. Best Young Specialists of JSC PIMCU were awarded (shaft men, timber-men, and other professions).The Overmen School programme was developed.A profession-oriented event was mounted to select candidates for universities enrolment in 2013. Target training programmes for employees were organised at universities and colleges.JSC Khiagda continued training for main industrial specialities at integrated advanced training courses for wellfield operators (ISL uranium production) de-veloped by Miass Geologic Survey College. In addition hydrometallurgy instru-mentation workers were trained at Vocational College No. 15.On the basis of its educational centre, JSC PIMCU started a mentor training programme to increase mentors’ professional level, skills, and competencies.Public transport drivers participated in a service culture programme. To ensure mobility of the LF personnel, they were trained in second and adjacent professions. Six specialists of JSC PIMCU participated in short-term trainings at facilities operating in the same field but not run by the Corporation.

Personnel reserve Rosatom personnel reserve programmes were carried out.

Table 23. Training and Development of ARMZ Uranium Holding Co. Personnel in 2013

3.4.6. Training and Development

2013 Results:


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Figure 35. Training Hours per Person by ARMZ Uranium Holding Co. Entities, hr/person

Nina Smirnova, Remote Control Operator at cat. 8 chemical production, Sulphuric Acid Shop of the JSC PIMCU Hydrometallurgical Mill

9 13

25

58 56

31

141

28

47

9

30

60

20

30

18

27

134

73

JSC Atomred-metzoloto

JSC PIMCU JSC VNIPIpromtech-

nologii

JSC Dalur CJSC RUSBURMASH JSC Khiagda

0 0 0 0 0

66 59

2

15

133

92

54

36

161614910

2011 2012 2013

Managers

Subordinates

JSC Atomred-metzoloto

JSC PIMCU JSC VNIPIpromtech-

nologii

JSC Dalur CJSC RUSBURMASH JSC Khiagda


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2014 Plans:

Employee value To continue implementation of the sports initiatives and organise more corporate sporting events

Internal communications

To organise three Information Days in 2014

Professional development and training

To develop and implement mentoring programmes

Personnel reserve To carry out the personnel reserve programmes Capita, Personnel Assets and Rosa-tom Talents, and new selection events to form a pool of well-qualified, top of the line, and junior managers to prepare them for work in key positions and projects

3.4.7. Work with Students and Youth

One of the priority areas of the ARMZ Uranium Holding Co.’s personnel policy is to look for, at-tract, and support talented young people with the required theoretical and practical knowledge.

In 2013 the pool of highly-qualified ARMZ Urani-um Holding Co. specialists mainly contained em-ployees with high-quality professional education.

In 2013 the work with youths and students per-formed by the Holding was also focused on pro-spective HR for the development of the research and production potential and succession within the Holding.

The Holding employs the following methods in its work with youths:

■ training employees and their family members at universities (target education);

■ inviting students to undergo their practical and pre-graduation training at the Holding entities;

■ organisation of mentoring; and ■ training, advanced training, etc.

Young Holding employees participated in the Rosatom Forsazh Youth Innovation Forum, in the organisation of the 3rd Youth Educational Environ-mental Forum Ekoline-2013, and the ARTnova Mu-sical Creative Project: sport competitions of various levels; volunteer clean-ups; and other social-relat-ed events.

On October 10–11, 2013, the final stage of the Young Talents competition was held (for the 3rd year in a row organised by ARMZ Uranium Holding Co.). Students from more than 15 Russian univer-sities participated in it. Winners were from NRNU MEPhI, National Mineral Resources University,

Russian State Geological Prospecting University, Ural State Mining University, Siberian Federal Uni-versity, Transbaikal State University, Moscow Pow-er Engineering Institute, and NRNU MEPhI Sever-sky Technology Institute.

2014 PlansTo continue active interaction with youths (also un-

der the Young Programmes project).

3.4.8. Support for Veterans and Pensioners

Following the traditions of the Ministry of Medium Machine Building, Ministry for Atomic Energy, and Ro-satom State Corporation, since 1992, the trade union of JSC Atomredmetzoloto has been providing social benefits to employees and retired atomic scientists. At present the delegate body of the JSC Atomred-metzoloto personnel is a trade union that participates in rendering legal and social support to personnel.


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As of December 31, 2013, 7 employees and 17 re-tired veterans were registered with the JSC Atomred-metzoloto trade union.

3.4.9. Trade Unions and Collective Agreements

Trade unions are operating at JSC PIMCU and JSC VNIPIpromtechnologii. At JSC Dalur there is a

Personnel Advisory Board that participates in the relations between the employer and employees. At CJSC RUSBURMASH there is no collective agree-ment, and the trade union is only formed by em-ployees of the economically autonomous structural subdivision Khiagda Drilling Office (61 people).

Thus, collective agreements exist at three S&A; such agreements are effective for three years and cover important issues regarding the relations be-tween the employer and employees.


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Table 24. Rate of Employees Covered by Collective Agreements in 2013, people, %

Entity Number of employees covered by collective agreements, people

Total amount of employ-ees, people

Rate of employees covered by collective

agreements, %

JSC PIMCU 9,313 9,313 100

JSC Dalur 442 442 100

JSC VNIPIpromtechnologii 409 409 100

3.4.10. Occupational Health and Safety

Occupational health and safety (OHS) goals of JSC Atomredmetzoloto are as follows:

■ zero industrial accidents; ■ compliance with safety requirements; ■ no production emergencies; and

■ the minimisation of occupational disease factors.

Radiation SafetyWithin the reporting period, the individual effective expo-

sure at JSC Atomredmetzoloto S&A was not more than 20 mSv. The individual exposure of 100 mSv was never exceed-ed from 2009 to 2013.

Entity Average Effective Exposure

JSC PIMCU 3.30

JSC Dalur 1.37

JSC Khiagda 1.19

JSC VNIPIpromtechnologii 1.32

Table 25. Average Effective Exposure in 2013, mSv

Figure 36. LTIFR at JSC Atomredmetzoloto Entities

2013 Results ■ LTIFR at JSC Atomredmetzoloto entities went

down from 1.07 to 0.55 as compared to the pre-vious three years. The reduction rate was 48%, with the target reduction rate of 10% (0.96) set by JSC Atomredmetzoloto.

■ Casualties occurred at JSC PIMCU and CJSC RUSBURMASH. As compared to the 3-year ref-erence period, the amount of casualties was re-duced nearly twofold, from 19 down to 10 casu-alties.

■ In 2013 at JSC Atomredmetzoloto there were no casualties subject to investigation in accordance with federal norms and regulations.

2,50

2,00

1,50

1,00

0,50

0,002011 2012 2013

2.23

1 0.96

0.550.39

actual target


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Figure 37. Number of Casualties at JSC Atomredmetzoloto Entities

Figure 38. Total Number of Casualties in 2011–2013

Figure 26. Fatal Injury Frequency Rate (FIFR)

2011 2012 2013

0.02 0.01 0.02

Figure 27. Lost Work Day Rate (LWDR)

2011 2012 2013

13.23 2.16 0.3

Figure 28. Occupational Diseases Rate (ODR)

2011 2012 2013

0.39 0.75 0.05

The injury rate was effectively reduced and safe working conditions were ensured through:

■ the safety culture development project based on best global practices and created with the assis-tance of DuPont Science and Technology; and

■ evaluation of S&A manager and specialist perfor-mance in terms of labour safety and industrial, ra-diation, and environmental safety.

2014 and Mid-Term Plans ■ Ensuring proper personnel rotation based on eval-

uation results; ■ use of radon testing devices at closed work sites;

and ■ implementation of technical measures for better

radiation safety at production facilities of S&A.

20,00

18,00

16,00

14,00

12,00

10,00

8,00

6,00

4,00

2,00

0,00average for 2010–2012 2013

19

10

2011 2012 201315

7

5

2

1

7

4

2

1

10

2

6

2

total

fatal

minor

group

major


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3.5. Intellectual Capital Management

3.5.1. Innovative ActivitiesJSC Atomredmetzoloto innovative activities pursue

the following goals: ■ To enhance the efficiency of uranium ore mining

and processing methods; ■ to increase the stake of “reasonably priced” mining

methods within the common framework of urani-um concentrate production; and

■ to introduce modern competitive methods in the course of business diversification.The following directions are considered as priority

in the Holding:

JSC PIMCU: ■ To develop a method for removing uranium ore tail-

ings into the goaf at HMPs; ■ further processing of off-balance ore dumps under

the contract with the Russian Ministry of Education and Science; and

■ pilot testing of non-waste gold-bearing sulphur waste processing.

JSC Khiagda: ■ To increase process wells efficiency.

JSC Dalur: ■ To test new technologies in the course of pilot works

at the Khokhlovskoye field.In 2013 the general innovation costs, including R&D,

were RUB 253.5 million, RUB 101.98 million of which was spent on R&D development. Innovative projects of JSC Atomredmetzoloto were financed by the Holding’s own funds and by subsidies granted by the Russian Ministry of Education and Science.

Figure 39. Holding Innovative Development Programme Costs, million RUB

Innovation Development ProgrammeDevelopment plans for breakthrough, mandatory

(environment protection and industrial security), and support technologies have been incorporated into four innovative projects implemented since 2011 under the JSC Atomredmetzoloto Innovation Development Pro-gramme for 2011–2020.

Project 1. Establishment of a New Uranium Geotechnical Production Platform

The purpose of the project is to create innovative, highly economical, and eco-friendly geotechnologies for uranium deposit development at all project stages (from exploration and mining to subsoil and land rec-lamation).

2013 Results ■ Laboratory tests of heap leaching (HL) and in situ

leaching in blocks (ISLB) stimulation with the help of surface-active agents (SAA) were completed. The SAA that are most effective for HL of picked off-bal-ance ore products and ISLB were identified. Pilot technical works (PTW) were commenced. Within two months of PTW, uranium extraction volume in-creased by 10% as compared to the currently em-ployed scheme.

■ An expert and analytical system was established for multi-factor comparative analysis of block processing, geotechnology optimisation, and planning and design of DISL block processing. With the help of the system, the ISL process can be intensified and JSC Dalur field development efficiency can be increased.

■ Optimum modes were identified and a process scheme developed for producing leaching agents at the mine. This was the result of experiments on producing sulphurous leaching solutions with ox-idising properties that were verified by Urals Sci-ence and Technology Centre in a laboratory and on a pilot plant.

■ Forecast and optimisation calculations were per-formed with regard to block processing at the Khiagda field with the use of sulphurous DISL on the basis of a software package developed by the NRNU MEPhI Seversky Technology Institute. Following the analysis of multi-option forecast calculations, recommendations were given for optimum operation modes, basic geotechnical processing values were determined for a set ex-traction grade, and a production schedule was drawn up. The recommendations will ensure in-

300

250

200

150

100

50

02011 2012 2013

156.

6

226

253.

5


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creased average uranium concentration in block product solutions, a quicker uranium extraction rate, and a lower rate of acid consumption.

■ Selection of optimum oxidising agents were completed for uranium in situ leaching from Khiagda ores. According to the experiments on leaching uranium from unoxidised ore samples in the presence of various oxidising agents, such agents bring about a threefold increase of the leaching rate and a 1.5-fold reduction of sulphur acid consumption.

■ Research was completed and a pilot operation commenced to process off-balance ore dumps fromJSC PIMCU. An ore-picking facility was mounted and put into operation to sort dumps from the Tulukuy quarry. In 2013, over 50 thou-sand tons of uranium ore concentrate were pro-duced from off-balance dumps with the use of the ore-picking facility.

Project 2. Development of a Refractory Ore Enrichment and Processing Method for the Elkon and the Streltsovsky Uranium Ore Districts

The refractory ore fields of the Elkon and the Streltsovsky uranium ore districts account for about 80% of uranium commercial reserves in Russia. Due to a high capital-output ratio and low uranium extrac-

tion level, the aim of this project is to reduce the prime cost of final products through modern, highly efficient technologies and integrated subsoil development.

2013 Results ■ Geophysical equipment was developed and intro-

duced for uranium gamma-tests at production sites and mines of JSC PIMCU. The equipment re-placed the outdated and worn out equipment devel-oped in 1970s–1990s. Following the introduction of Uran-M devices, in 2013, actual uranium losses and ore dilution were diminished at Mines Nos. 1 and 2 and the Gluboky mine.

■ JSC PIMCU performed pilot testing of the optimised method for uranium agitation leaching, which resulted in a significant reduction of oxidising agent consump-tion as well as the consumption of materials, and agents and power saving, which reduced the aggre-gate costs of hydrometallurgical crude ore processing.

Project 3. Introduction of Geological Mine Modelling and Mining Operations Planning: Development of a Single Geologic Database

2013 Results ■ The development of producing blocks of Mine No. 8

demonstrated that modern mining and geological

Ruslan Urubchev, Pump and Engine Repairman, JSC PIMCU


90

CAD technologies (MineFrame) facilitate less ore dilution and increased uranium content in mined ore as compared to the mining method traditionally used at JSC PIMCU.

■ Under the project of Streltsovsky Ore Field Geody-namic Grounds creation, a laser strainmeter was developed, a 3D model of rock mass stress-strain behaviour completed, and an automated wide-range lithological pressure control system was de-veloped and installed at monitored areas of Mines 1 and 2 and the Gluboky mine. In 2014, the plan is to complete the geodynamic grounds project that will increase underground operations safety and reduce the number of mining operations accidents.

■ Contingency geomechanical modelling substantiat-ed decreasing the goaf to be stowed from 80% to 67%, thus saving on stowing operations.

Project 4. Development of a New-Generation Integrated Hardware and Methodical Logging System for Direct Uranium Identification in Wells with Prompt Neutrons Method (IHMS PNM)

2013 Results ■ Detailed engineering drawings were prepared,

and prototypes of the IHMS PNM-M-48 downhole tool were manufactured for direct uranium in situ identification with the prompt neutrons method;

■ in terms of the operational life (200–250 hrs) of the ING-12-50-100BT neutron generator, the equipment is at the level of similar foreign de-vices and is unprecedented in terms of its small logging tool external diameter of 48 mm. Due to reducing the tool diameter from 60 to 48 mm, it can be used for measuring exploration and pro-cess wells with a wider structure both in Russia and abroad;

■ metrological examination and pilot operation were completed to certify the measurement method. Method certification will be done in 2014. In 2012 the project Developing a Complex Ge-

otechnology-Based Processing Method for Low-Grade Uranium Ore was launched. In 2013–2015 the Russian Ministry of Education and Science sub-sidised RUB 150 million for R&D. The 2013 R&D ac-tivities by the Transbaikal State University (RUB 30 million) were funded using the subsidy. In 2014 the project will be continued. Further RUB 50 million from the subsidised funds were allocated to this project.

In 2013 project approach to R&D was introduced. It is supposed that treatment of R&D as one of the stag-es making up the chain of innovation development, introduction, and commoditisation will make R&D self-sustaining.

3.6. Social Capital Management3.6.1. Stakeholder Engagement

Stakeholders Key issues Engagement mechanisms

Shareholders ■ building up and diversifying re-source base

■ effective use of investments ■ safety priority

■ convening General Meetings of Shareholders

■ disclosure on an external web-site

■ regular reporting

Investors ■ effective use of investments and good growth quality

■ regular meetings ■ disclosure on an external website

Local communities ■ expectations of local communi-ties

■ implementation of sustainable development projects

■ public opinion polls ■ public hearings related to an-

nual report publications ■ public hearings related to the

construction of new facilities ■ information via mass media


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Stakeholders Key issues Engagement mechanisms

State and municipal authorities and local communities in regions of operation

■ tax deductions ■ developing regions of operation ■ environmental responsibility ■ responsible personnel and so-

cial policy

■ cooperation agreements ■ regular meetings

Business partners ■ stable cooperation ■ protecting and complying with

shareholders’ rights and inter-ests

■ modern projects

■ meetings ■ disclosure on an external web-

site

Holding’s personnel ■ fair remuneration ■ training, development, and ca-

reer prospects ■ competitive social benefits

■ drawing up and signing collec-tive agreements

■ Information Days ■ regular meetings between man-

agers and workers to discuss Holding activities, including the Foremen Council at JSC PIMCU

■ internal mass media and feed-back

■ public hearings related to annu-al report publications

Consumers ■ stable and reliable supplies ■ regular meetings ■ disclosure on an external website

Mass media and research and pro-duction associations

■ operation efficiency ■ development prospects ■ environmental safety ■ major developments ■ social responsibility

■ press conferences and media briefings

■ public hearings related to an-nual report publications

■ media tours for Russian and foreign mass media

■ comments on issues related to JSC Atomredmetzoloto activi-ties


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3.6.2. Developing Regions of Operation

3.6.2.1. Economic Impact in Regions of Operation In 2012 Rosatom State Corporation established

a consolidated group of taxpayers. On the part of JSC Atomredmetzoloto, the programme was joined by JSC PIMCU (Transbaikal Territory), JSC Khiag-da (Buryatia), JSC Dalur (Kurgan Region), and CJSC RUSBURMASH. The CGT was established to incor-porate the income tax base of interrelated (equity holding) companies and change over to paying the income tax based on the income share of each CGT member. The establishment of CGT brought about

redistribution of the income tax paid to the Mos-cow and the St. Petersburg regional budgets and the budgets of the regions where Rosatom facilities are registered and operated. Each subject of the Russian Federation receives a part of the consoli-dated Rosatom income tax depending on the value of fixed assets registered there and the number of personnel.

In 2013 tax deductions to regional budgets in the regions of operation increased. The biggest growth was demonstrated by tax deductions to the Trans-baikal budget due to JSC PIMCU registered there; in 2013, RUB 565.9 million in tax was paid in addition to the planned amount.

Table 29. Taxes Paid by ARMZ Uranium Holding Co. Key Entities to Regional Budgets, million RUB

Entity 2011 2012 2013

JSC PIMCU 797 641 1,017

JSC Dalur 158 270 378

JSC Khiagda 100 126 197


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On February 28, 2013 the regional social and eco-nomic development programme was approved for Krasnokamensk and the Krasnokamensk Region to fund city facilities from the regional budget. The 2013–2017 city development plan was drawn up.

The most important 2013 project was the launch of air communication between Krasnokamensk and Chita. The first flight took place on August 5, 2013.

In 2013 in Krasnokamensk a sport centre project was under implementation: a construction site was selected, a design was completed, and a contractor was found. RUB 35 million was allocated to renovate the race tracks and the terrace of the Argun stadi-um. RUB 280 million was allocated to ensure more places for children in kindergartens. A total of RUB 346 million was allocated for Krasnokamensk social development.

2014 Plans ■ Launching a new Krasnokamensk—Chita flight; ■ completion of the sport centre general construction

works; ■ reconstruction of two kindergartens; ■ transfer of the ownership of treatment facilities and

a water conduit on the JSC PIMCU balance sheet to the municipal authorities for reconstruction; and

■ opening Argun and Bogatyr gyms and the Argun stadium for visitors.

3.6.2.2. 45 Things by the JSC PIMCU 45th Anniversary Programme

In August 2013, JSC PIMCU celebrated its 45th anni-versary. By the anniversary date, ARMZ Uranium Hold-ing Co. and JSC PIMCU had completed the 45 Things by the JSC PIMCU 45th Anniversary Programme aimed


94

at better labour conditions and a more active social life in Krasnokamensk. A part of the 45 things was already

completed in 2012. JSC Atomredmetzoloto and JSC PIM-CU allocated over RUB 410 million for the programme.

Table 30. 45 Things by the JSC PIMCU 45th Anniversary Programme

No. Completed in 2012 Execution period Check-off

1 Presenting school backpacks to JSC PIMCU employ-ees' children entering the 1st grade

25.08.2012

2 Opening a memorial to S. Pokrovsky, the first director, in school No. 7 named after him

01.09.2012

3 Volunteer clean-up at the Gornyak sanatorium asso-ciated with the International Day for the Elderly and arranging recreation for retired veterans

29.09.2012–01.10.2012

4 2nd Youth Educational Environmental Forum ECOL-INE-2012 (winners awarded on 20.10.2012)

September–October 2012

5 Launching an additional retirement benefit corporate programme for JSC PIMCU employees

since 01.10.2012

6 Open competitions among Company employees to develop a Best in Profession sign or logo to be used as one of the JSC PIMCU official awards and a JSC PIMCU anniversary badge

October–November 2012

7 45 Working Weeks Marathon for the JSC PIMCU 45th Anniversary among Company teams

October 2012 – July 2013

8 Putting Mine No. 8 into operation November–December 2012

9 Issue of the Gornyak Priargunya (Priargunye Mine-worker) newspaper in A3 colour variant (distributed at newsstands)

since 20.11.2012

10 Opening a skating rink and playgrounds at the Gornyak sanatorium and New Year recreation for JSC PIMCU employees' families

December 2012 – January 2013

Completed in 2013

11 Enactment of the new version of the Regulations of Vacation Fare Compensation (for JSC PIMCU employees once a year and for employee's family members once in three years)

January

12 Modernisation of changing rooms and showers at the Uranium Mine Office

January–December


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13 Repair and modernisation of facades and accommoda-tion premises of the Gornyak sanatorium

January–August

14 Construction of an administrative building for the Ur-tuyskoye Section Administration

January–November

15 Reconstructing the DAURIYA recreation centre and equipping a cinema

January–August

16 Sports competitions for Company entities including new types of sports

January–August

17 An anniversary competition among amateur artistic groups

January–August

18 Completion of de-preservation of Mine No. 6 with pumping water out of shafts

February

19 2nd ARTnova Musical Creative Project February–August

20 Good Deed volunteer movement; registering the Kras-nokamensk Youth Public Organisation for implementing joint social projects

March

21 Installation of bus stops at production sites and opti-misation of personnel transfers

March–August

22 Repair of facilities at the Sputnik and the Argun kids recreation camps

May

23 Signing 45 target contracts for university and college education with grant payments

May

24 The Bridge Between Generations Parade dedicated to the Victory Day

May

25 Presenting backpacks to first-grade and school gradu-ate children of Company employees

May 25

26 A social campaign on planting pine trees at two city sites (Shakhtyorov Prospect and Pokrovsky park) (some of them with name plates)

June

27 Establishment of a paintball club of the JSC PIMCU shop-floor trade union

June

28 Equipping outdoor playgrounds in every part of the city June

29 Constructing an outdoor sporting grounds for youths June


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30 A city-wide youth volunteer clean-up associated with the Day of Youth

June

31 Industry-related graffiti competition June

32 Work of the anniversary-related youth construction team

June–August

33 Summer school for children at the Argun camp June–August

34 Taking pictures and organising photo exhibitions In-dustrial Art and Krasnokamensk Today; workshops for beginners conducted by renowned industrial art style Moscow photographers. Pictures of production depart-ments were made.

June–August

35 Launch of construction of a sport centre with an inte-grated gym and a swimming pool

August

36 Installation of a JSC PIMCU memorial August

37 Installation of the JSC PIMCU Labour Memorial in the Stroiteley Prospect with 45 Steps to the JSC PIMCU 45th Anniversary information boards

June–August

38 Meeting in Krasnokamensk of Company veterans from all over Russia

August

39 Anniversary-related sports competitions July

40 Anniversary-related Best Young Specialist competition (by profession) with more professions nominated

July

41 1st Uranium Racing Inter-Regional Motor Fest July

42 Anniversary-related JSC PIMCU yearbook entitled “45 Steps to the 45th Anniversary”

August

43 Issue of commemorative JSC PIMCU 45th anniversary medals

August

44 Opening a branch of the Health Academy (city kine-sitherapy centre)

August

45 Installation of a monument to the first Company direc-tor in the Pokrovsky park

August


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3.6.2.3. Charity and SponsorshipIn 2013, ARMZ Uranium Holding Co. continued

charity projects mainly focusing on the regions of op-eration.

2013 Key Projects ■ 2nd ARTnova Musical Creative Project; ■ 3rd Youth Educational Environmental Forum EKO-

LINE-2013; ■ 3rd Kids and Youth Sport Competitions Break-

through-2013;

■ arranging a tour to Greece for the winners of the ARTnova-2013 projects;

■ support of kids and youth sport teams and educa-tional institutions of the villages of Uksyanskoye and Lyubimovka (Dalmatovo Area, Kurgan Region) and the city of Dalmatovo in areal, territoryial, regional, and national championships; and

■ sponsoring of a volunteer movement and the im-plementation of social and youth projects in Kras-nokamensk.

3.7. Natural Capital Management

3.7.1. Environmental Policy of the Company

Mining facilities invariably cause an ecological foot-print. The most important environmental safety direc-tion is correct forecasting of environmental impact at the design and operation stages, minimisation of such impact in the course of current operation, and recla-mation upon shutdown.

The key document in this area is the JSC Atomred-metzoloto Environmental Policy based on rational use of natural resources and maximum environment pres-ervation. Under Rosatom Decree No. 1/937-П dated September 5, 2013, S&A also developed and approved their individual Environmental Policies.

The JSC Atomredmetzoloto Environmental Policy supports manufacturing competitive products with

a minimum environmental footprint and the best pos-sible preservation of the natural environment in pro-duction areas.

The following was completed to implement the En-vironmental Policy:

■ environmental impact was reduced due to compli-ance with Russian law and international agreements;

■ economic mechanisms were implemented to stim-ulate footprint reduction;

■ the Company’s contractors complied with environ-mental, industrial, and labour safety norms and standards set by JSC Atomredmetzoloto; and

■ a programme for introducing an integrated quality and environmental protection management system in compliance with ISO 9001 and ISO 14001 at key management and production subdivisions was im-plemented.


98

3.7.2. Protection of Land and Biological Diversity

The downhole in situ uranium leaching is more ac-ceptable in terms of environment preservation since it hardly disturbs the natural landscape. This method is used at JSC Khiagda and JSC Dalur.

In case of underground mining (JSC PIMCU) there is a goaf that is filled with a cement, sand, and gravel mix to ensure safety and minimise radon escape.

Upon field development disturbed land is reclaimed.

* Due to alteration of the method, the values are calculated under

Russian Federal State Statistics Service (Rosstat) Decree No. 676

on Approving Statistical Tools for Federal Statistic Monitoring of

Land Reclamation and Top Soil Removal and Use by the Federal

Supervisory Natural Resources Management Service dated De-

cember 29, 2012. The increase of disturbed land resulted from the

development of new deposits.

Figure 40. Total Amount of Disturbed Land at JSC PIMCU in 2011–2013, ha*

16

14

12

10

8

6

4

2

02011 2012 2013


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Figure 41. Total Amount of Disturbed Land at JSC Dalur in 2011–2013, ha*


Russian Federal State Statistics Service (Rosstat) Decree No.

676 on Approving Statistical Tools for Federal Statistic Monitor-

ing of Land Reclamation and Top Soil Removal and Use by the

Federal Supervisory Natural Resources Management Service

dated December 29, 2012.

Figure 42. Total Amount of Disturbed Land at JSC Khiagda in 2011–2013, ha*


Russian Federal State Statistics Service (Rosstat) Decree No.

676 on Approving Statistical Tools for Federal Statistic Monitor-

ing of Land Reclamation and Top Soil Removal and Use by the

Federal Supervisory Natural Resources Management Service

dated December 29, 2012. Since 2012 disturbed land area ex-

cludes mining allotment areas.

ARMZ Uranium Holding Co. regularly monitors the environment and performs environmental surveys of bushes and plants in its territories.

140

120

100

80

60

40

20

02011 2012 2013

300

250

200

150

100

50

02011 2012 2013


100

3.7.3. Protection of Water Resources

Water Consumption

Figure 43. Water Consumption in 2011–2013 by Purpose and Entity, thousand m3

Water for production

needs

Water for drinking

needs

Total water con-

sumption

Underground

springs

Surface springs Exceeding set

limits

Waste Water Discharge

Figure 44. Waste Water Discharge in 2011–2013, JSC PIMCU, thousand m3

JSC DalurJSC Dalur applies a closed-type technological cycle,

so the company does not discharge water containing hazardous chemical agents and radioactive nuclides.

Household waste water from the sewage is taken to a contracted special treatment facility.

JSC KhiagdaNo waste water is discharged into surface water

bodies. Water discharged on the terrain undergoes treatment. This type of discharge is not limited by any norms.

JSC PIMCU JSC Dalur JSC Khiagda

27,2

80.2

41.1

3

59.2

6,99

8.99

48.7

1

17.8

4

34,2

79.1

9

89.8

4

74.0

4

28,9

60.5

9

89.8

4

81.9

7 5,31

8.6

0 0 no no no

2011 2012 2013

12,553.60 12,470.2113,291.68


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3.7.4. Air Protection

Table 31. Discharge of Pollutants into the Air by JSC PIMCU, tons

Pollutant 2011 2012 2013

Carbon monoxide 765.31 870.87 929.23

Sulphur dioxide 5,674.68 6,424.87 6,462.71

Nitrogen dioxide 1,493.21 1,499.81 1,604.37

Nitrogen oxide 236.13 238.13 286.49

Inorganic dust and ash 5,086.34 5,223.29 6,477.00

Inorganic dust 187.10 205.75 179.27

Other 216.41 239.19 480.05

Total 8,572.84 14,701.91 16,419.12

Table 32. Discharge of Pollutants into the Air by JSC Khiagda, tons

Pollutant 2011 2012 2013

Carbon monoxide 80.40 73.82 69.57

Sulphur dioxide 9.65 9.88 9.37

Nitrogen dioxide 16.41 4.6011.26

Nitrogen oxide

Inorganic dust and ash 12.57 17.93 15.15

Inorganic dust 0.04 0.14 0.35

Other 3.87 0.35 2.96

Total 122.94 106.73 108.66

The discharge figures are given for the following two production sites: CPB (Transbaikal Territory) and the in situ leaching shop (Buryatia).

In 2013 the discharged amount went up due to production extension, new facilities construction and putting into operation, and 27 additional vehi-cles, the use of which started in 2013. Furthermore in 2013 the coal boiler house of the ISL shop was

reconstructed (modernised) with a power increase from 2.89 Gcal/hr up to 6.0 Gcal/hr and the addition of a new boiler (now 3 instead of 2), which resulted in increased coal consumption and more pollutants discharged into the air.


102

Table 33. Discharge of Pollutants into Air by JSC Dalur, tons

Pollutant 2011 2012 2013

Carbon monoxide 4.56 4.50 3.92

Sulphur dioxide 0 0 0

Nitrogen dioxide 2.01 1.98 1.73

Nitrogen oxide 0.33 0.32 0.28

Inorganic dust and ash 0 0 0

Inorganic dust 0.001 0.001 0.001

Other 3.57 3.59 3.63

Total 10.47 10.40 9.56

3.7.5. Waste Treatment

Hazard class YearEntity


Hazard class 1 2011 2.69 0.01 0.07

2012 3.807 0.007 0.087

2013 3.427 0.01 0.066

Hazard class 2 2011 1.37 0.89 0.32

2012 1.386 0.122 2.018

2013 0.636 0 1.963

Hazard class 3 2011 614.49 0.37 0.99

2012 930.912 0.336 1.385

2013 152.552 0 4.739

Hazard class 4 2011 2,694.6 22.90 4,339.41

2012 2,020.6 22.80 5,131.5

2013 2,650.9 45.0 3,380.7

Table 34. Production of Waste of All Hazard Classes in 2011–2013, tons


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Hazard class YearEntity


Hazard class 5 2011 22,180,541 9.70 7,224.47

2012 21,279,598 7.60 7,082.9

2013 24,467,312.3 6.9 1,893.8

Total 2011 22,183,854 33.87 11,565.26

2012 21,282,555 3.,87 12,217.4

2013 24,470,119.8 51.9 5,281.2

Waste stored at operated facilities, tons (%) 2013 24,469,897.37 (99.99%)

0 4,950.86 (93.7%)

Waste handed over to special contractors for use and treatment, tons (%)

2013 38,213.632 (0.001%)

25.6 (50%) 332.69 (6.3%)

Exceeding set limits 2013 none none none


104

* The total air protection costs amount also includes RUB 0.499 million for the installation of gas treatment equipment in the course of

reconstruction (modernisation) of the JSC Khiagda coal boiler house as fixed asset overhaul costs for environment purposes.

** The total water body costs include RUB 51.681 million for the construction of a flood water system and surface water collection from

operational blocks, hydro insulation of storm water sumps at Deposit 6 to prevent storm water from mining sites from getting into the

hydrographic network, and prevent pollution of the phreatic aquifer.

Costs of the development, introduction, and certification preparation of the management system complying with ISO 9001:2008 and ISO

14001:2004. Total under the contract: RUB 1.670 million carried over to 2014; in 2013 the costs were RUB 0.23 million.

3.7.6. Expenses Related to Environment Preservation

Table 35. Environmental Protection Expenses in 2013, million RUB

Entities JSC PIMCU JSC Dalur JSC Khiagda

Environmental impact prevention costs

Air protection 206.37 0.10 1.06 *

Protection of water resources 45.46 0.47 80.48 **

Protection of land 18.45 0.28 19.45

Environmental management costs

Environmental monitoring 13.2 1.99 1.50

Environmental projects 107.00 0.05 4.12

Total 390.48 2.89 106.61


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STAKEHOLDER ENGAGEMENT IN THE COURSE OF REPORT PREPARATION4.1. Discussions with Stakeholders in the Course

of Report Preparation

4.2. Taking into Account Stakeholder Suggestions

4.3. Statement of Public Assurance


106

One of the basic principles of public reporting at JSC Atomredmetzoloto is stakeholder engagement in the course of report preparation.

For more details on cooperation principles, the stakeholders’ key interests, and relations mecha-nisms, see 3.6.1. Stakeholder Engagement.

4.1. Discussions with Stakeholders in the Course of Report Preparation

Two discussions were held in accordance with the АА1000SES Stakeholder Engagement Standard while preparing the Report. The purpose was to get feedback from stakeholders on the quality of priority topic, sustainable development, and capital manage-ment disclosure in the Report. All ARMZ Uranium Holding Co. stakeholders were invited to participate in the discussions.

Discussion 1. JSC Atomredmetzoloto 2013 Basic Performance and Efficiency Enhancing Measures

On March 26, 2014 from 10:00 to 12:00 in the office building of JSC Atomredmetzoloto (22 Bolshoy Drovy-anoy Per., Moscow) a discussion on JSC Atomred-metzoloto’s 2013 Basic Performance and Efficiency Enhancing Measures was held.

The discussion was related to the main production performance of the Rosatom Mining Division in 2013 and the main performance results of CJSC RUSBUR-MASH and JSC VNIPIpromtechnologii in 2013.

Discussion 2. Organisational Changes within the Rosatom Mining Division and JSC Atomredmetzolo-to Development

On March 26, 2014 from 12:00 to 13:30 in the of-fice building of JSC Atomredmetzoloto (22 Bolshoy Drovyanoy Per., Moscow) a discussion on Organisa-tional Changes within the Rosatom Mining Division and JSC Atomredmetzoloto Development was held.

The discussion was related to the evolution of the Rosatom Mining Division under the changing global uranium market conditions and the JSC Atomred-metzoloto development concept.

For more details about the discussion see the JSC Atomredmetzoloto website: http://www.armz.ru/press/news/?id=510.

Public Discussions of the Draft Annual ReportOn May 20, 2014 an in absentia discussion of the

2013 JSC Atomredmetzoloto public annual report was held. The public discussion involved stakeholder representatives. Stakeholders expressed their opin-ion about the significance of disclosed information.

In the course of the discussions, 16 suggestions and recommendations were received

from stakeholders, and 9 of them were implemented in this Report, while the rest are still

being reviewed by the Holding’s management in the course of

ongoing operations


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4.2. Taking into Account Stakeholder Suggestions

Table 36. Meeting Commitments Undertaken during 2012 Report Preparation

No. Stakeholder suggestions JSC Atomredmetzoloto suggestions

1 To specify what needs of the regions will be provided for by means of the taxes paid by the Holding entities.

See 3.6.2. Developing Regions of Operation.

2 To invite more parties to hearings and invite representatives of public environmental organi-sations, including those disapproving of the nuclear industry, to participate in discussions with stakeholders and public hearings.

The list of in absentia hearing participants has been extended.

3 To conduct an excursion for environmentalists and Rosatom Community Council members to Holding entities, with JSC PIMCU being the first place.

Not done due to budget optimisation.

4 To include ARMZ Uranium Holding Co.’s posi-tion and interests in sustainable development in the current Report or mention that they will be developed in 2013.

To be included in the 2014 Report.


108

Table 37. Taking Shareholder Suggestions into Account as Made during Discussions in the Course of 2013 Report Preparation

No. Stakeholder suggestions based on discussions

JSC Atomredmetzoloto suggestions

1 To introduce a section devoted to environmen-tal protection into the Report (including results of the Environment Year).

See 3.7. Natural Capital Management.

2 To extend CJSC RUSBURMASH geographic reach outside the Russian territory, diversify operations to not to limit them to drilling, in-crease quality, reduce prime costs, and develop the company as an integrated business that also offers geologic exploration services.

For future. The suggestion will be reviewed by the Holding's management in the course of ongoing operations. The 2013 JSC Atomred-metzoloto Annual Report does not require the Company to react to this suggestion.

3 To recommend JSC VNIPIpromtechnologii to switch over to engineering activities, which means complete restructuring of its current activities with the introduction of global tech-nical and technological solutions becoming the core activity.

For future. The suggestion will be reviewed by the Holding's management in the course of ongoing operations. The 2013 JSC Atomred-metzoloto Annual Report does not require the Company to react to this suggestion.

4 The 2013 JSC Atomredmetzoloto Annual Report should underline the Company's re-sponsible approach to labour and industrial safety and indicate positive trends in these areas.

See 3.4.10. Occupational Health and Safety.

5 To include the mentioned development pros-pects of JSC Atomredmetzoloto in the Strategy section of the Annual Report.

See 2.1. Business Strategy.

6 To mention the effect from the Rosatom Pro-duction System implementation in monetary terms.

See 3.3.8.1. Implementing RPS Projects.

7 To disclose main KPIs in the report, together with injury rates (if the data collection system allows).

See 3.4.2. KPI System.

8 To include information about new risks, includ-ing those related to the Company's operations in the US and Canada in view of the latest political circumstances.

Information about risks related to the Com-pany's activities in the US and Canada will be included in the Uranium One Holding Report, and 2.2.3. Risk Management of the JSC Atom-redmetzoloto Report specifies the risks that JSC Atomredmetzoloto is prone to.

9 To make strategy development the priority top-ic of the annual report in the following report-ing period.

For future. To be taken into account when de-veloping the 2014 Report concept.


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No. Stakeholders' suggestions based on discus-sions

JSC Atomredmetzoloto suggestions

10 To include the CJSC RUSBURMASH project roadmap in the Report.

See 2.3.1. CJSC RUSBURMASH Activities.

11 To describe the KPI system and its perfor-mance.

See 3.4.2. KPI System.

12 To disclose the changes in the marketing and sales policy resulting from restructuring.

See 2.1.3. Marketing and Sales Policy.

13 In next reports, to confirm the GRI G4 compli-ance level with a non-financial audit.


14 To include a chapter about Company perfor-mance in the Report.


15 To include significant developments outside the reporting period in the Major Developments section.


16 To disclose capital business models, i.e. specify what capital and in what amount they were available at the beginning of the reporting pe-riod and what the gains (value delivery) were in the reporting period.

For future. To be included in the 2014 Report.


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4.3. Statement of Public Assurance

Background JSC Atomredmetzoloto (hereinafter referred to as

“ARMZ Uranium Holding Co.” or the “Company”) sub-mitted its 2013 Annual Report (hereinafter referred to as the “Report”) for us to review, whereby we also had a chance to verify the comprehensiveness and signif-icance of its contents and Company’s response to our recommendations. For this purpose our representa-tives were invited to participate in two discussions with stakeholders held on March 26, 2014:

■ Discussion 1. JSC Atomredmetzoloto 2013 Basic Performance and Efficiency Enhancing Measures; and

■ Discussion 2. Organisational Changes within the Rosatom Mining Division and JSC Atomredmetzolo-to Development.We also took part in the in absentia public discus-

sion of the draft Report on May 20, 2014.

Draft Report Evaluation ProcedureOur opinion is based on comparative analysis of two

Report versions (draft Report for public discussion and the final version of the Report), materials that were provided to us (minutes and a table with stakehold-ers’ comments) upon the discussions, and comments from the management and employees of the Holding that were made in the course of public assurance of the Report.

In the course of public assurance, we were not trying to verify the information collection or analysis system; neither did we confirm the accuracy of any information included in the Report. All participants of public discussions had a chance to share their opin-ion. The Company did not remunerate us in any way for taking part in the public assurance procedure.

Evaluation, Comments, and Recommendations We unanimously evaluated the Report in a pos-

itive manner in terms of its form and the scope of information included in it. We find it very important that the Report was prepared voluntarily and is a good example of an enhanced transparency on the part of the Company. In preparing the Report, the Company demonstrated that it intended to ensure public and environmental satisfaction and was pre-pared to engage in open dialogue with stakeholders about various issues concerning its activities. We can see that the Company’s management realises the importance and prospects of engaging stake-holders.

One of the advantages of the Report is that it was prepared in compliance with international standards (Global Reporting Initiative (GRI rev. G4.0), АА1000 In-stitute of Social and Ethical Accountability standards, and IIRC International Integrated Reporting Frame-work). Due to its integrity, the Report discloses in-formation about the Company’s main activities and sustainability development performance.

We are not aware of any facts that could under-mine the accuracy of the data included in the Report. We think that the information disclosed in the Report is sufficient both in terms of compliance with inter-national public reporting standards and taking into account stakeholder comments made at the Report preparation stage. We believe that it is the integrated Report that should represent the official position of the Company’s management with regard to socially significant issues and activities of the Company.

Significance of Information We think that in the Report the Holding managed to

disclose all topics important for stakeholders. The Report represents the Company’s position on strategic develop-ment, financial and economic performance, and social, environmental, and economic impact.

The priority topics considered in the Report are: ■ organisational changes within the Rosatom Mining

Division and enhancing the efficiency of the Mining Division part located in Russia; and

■ key production performance as of the end of the year.All significant information on the above topics was

disclosed properly.

Comprehensiveness We believe that the Report contains comprehen-

sive information about sustainable development and JSC Atomredmetzoloto’s sustainability performance and describes nearly all the activities of the Compa-ny that influence economy, society, and environment and are of interest for stakeholders. To ensure com-pliance with the comprehensiveness principle, the Report contains reference to regulating documents and additional open sources, including the corporate website of the Company.

Company’s Reaction to Stakeholders’ Comments and Suggestions

In our opinion, the Company is stable in terms of stakeholder engagement and public reporting. Three


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events engaging stakeholders were mounted in the course of the Report preparation.

In fact, stakeholder engagement had started before the preparation of the Report, at the concept develop-ment stage. Stakeholders had a chance to make their suggestions and recommendations with regard to the information to be disclosed in the Report.

The Company reacted to stakeholders’ comments by elaborating the final version of the Report and in-troducing additional information. In particular, the following sections were reviewed and extended: Busi-

ness Strategy, Natural Capital Management, Occupa-tional Health and Safety, Implementing RPS Projects, KPI System, etc. The Company undertook to disclose information on an array of other matters in future Re-ports or provided a reasonable explanation for not dis-closing certain information.

Thus, in the course of Report preparation the Com-pany demonstrated that it was eager to react to stake-holder suggestions and recommendations and deal with the issues raised.

Stepan Zhiryakov member of the Russian Council Committee for Agricultural and Food Policy and Use of Natural Re-sources, representative of the legislative (representational) state agency of the Transbaikal Territory

Grigory Mashkovets Ph.D in Geology and Mineralogy, Professor, General Director of All-Russian Scientific Research Institute of Mineral Resources (FSUE VIMS)

Yury DidenkoChairman of the Town of Krasnokamensk Council, Transbaikal Territory

Aleksey ZammoyevChairman of the Town of Krasnokamensk and Kranokamensk Area Council, Transbaikal Territory

Boris PichkurenkoHead of the Town of Krasnokamensk, Transbaikal Territory

Andrey AnosovDeputy Head of the Dalmatovo Area, Kurgan Region

Gennady ShirokovGeneral Director of Dalspetsstroy LLC, Dalmatovo Area, Kurgan Region

Olga PlyaminaExecutive Director of Greenlight International Environmental NCO

Svetlana DvoryaninovaDeputy General Director and Head of the Information Department at Nuclear.ru Information Agency


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APPENDICESAppendix 1. Matrix of Company’s Activities and Sustainable Development Data Significance

Appendix 2. Table of Standard GRI Disclosures

Appendix 3. Table of Disclosures as per the Reporting Standard of Rosatom State Corporation

Appendix 4. Auditor’s Opinion on Financial Statements Accuracy

Appendix 5. Report on Compliance with the Code of Corporate Conduct

Appendix 6. Terms and Abbreviations


114

The average score given to each of the aspects was determined separately on the basis of evaluation by JSC Atomredmetzoloto representatives and stakeholders’ representatives. A data significance matrix was devel-oped on the basis of the above analysis (see Figure 45. Matrix of Company’s Activities and Sustainable Devel-opment Data Significance).

The most significant aspects that must be disclosed are those that scored:

■ at least 4.0 as evaluated by both internal and exter-nal stakeholders;

■ at least 4.0 as evaluated by external stakeholders and at least 3.0 as evaluated by internal stakehold-ers; and

■ at least 4.0 as evaluated by internal stakeholders and at least 3.0 as evaluated by external stakehold-ers.The horizontal axis demonstrates significance for

the Company and the vertical one demonstrates sig-nificance for external stakeholders.

The aspects that scored 3.0 to 4.0 in the average were also taken into account during the Report preparation.

Appendix 1. Matrix of Company’s Activities and Sustainable Development Data Significance

Figure 45. Matrix of Company’s Activities and Sustainable Development Data Significance

1 2 3 4 5 6

5

4,5

4

3,5

3

2,5

2

1,5

1

0,5

0

15171611

8

2110

12

56

19

13

322

20

1 2184

1 Social impact in regions of operation2 Public policy3 Business diversification and development of promising segments4 Employment5 Health and safety at work (including industrial safety and compliance of labour conditions with international occupational and industrial safety standards)6 Investment programme7 Innovative activities and technological development programme

8 Global uranium markets9 Training and education (including availability of qualified workforce and talent development)10 General investment in environmental protection11 Key production performance12 Occupational health and safety13 Safety approaches14 Market presence15 Outlook for the future16 Raw material base development and uranium production17 Development strategy

18 Key risk and opportunity management19 Environmental impact management20 Performance management 21 Business stability22 Economic performance

7

914


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GRI Clause Reflected in the Report Report section/clause Notes

General Standard Disclosures

Strategy and analysis

G 4-1 Statement from the most senior deci-sion-maker of the organ-isation

Disclosed in full Address by the Chairman of the Board of Direc-tors and Address by the Director General

Organisational Profile

G 4-3 Name of the organ-isation

Disclosed in full 1.1. General Information about JSC Atomred-metzoloto

G 4-4 Primary brands, products, and services


G 4-5 Location of the organisation’s headquar-ters

Disclosed in full Contact Information

G 4-6 Countries where the organisation operates


G 4-7 Nature of owner-ship and legal form


G 4-8 Markets served Disclosed in full 1.2. Presence in Markets

G 4-9 Scale of the organ-isation

Disclosed in full 2013 Key Performance Indicators, 3.4.3. Human Capital Features, 1.1.3. Holding Organisation, 3.2.1. Financial Manage-ment

Appendix 2. Table of Standard GRI Disclosures

6


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G 4-10 Number of em-ployees

Disclosed in full 3.4.3. Human Capital Features

Substantial portion of the organisation’s work performed by workers who are legally recog-nized as self-employed, or by individuals oth-er than employees or supervised workers, including employees and supervised employees of contractors — not registered.

G 4-11 Percentage of total employees covered by collective bargaining agreements

Disclosed in full 3.4.3. Human Capital Features

G 4-12 Supply chain Disclosed in full 1.3. Value Chain and Business Model

G 4-13 Changes regard-ing the organisation’s size, structure, or own-ership


Changes in the location of suppliers, the struc-ture of the supply chain, or in relationships with suppliers — none.

G 4-14 Precautionary approach or principle

Disclosed in full Not applicable

G 4-15 Externally devel-oped charters, principles, or other initiatives


G 4-16 Memberships of associations


Identified Material Aspects and Boundaries

G 4-17 List all entities included in the organ-isation’s consolidated financial statements

Disclosed in full Information about the Report

G 4-18 Process for de-fining the report content and the Aspect Bound-aries



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G 4-19 Material Aspects Disclosed in full Information about the Report

G 4-20 Material Aspect Boundary outside the organisation


G 4-21 Material Aspect Boundary outside the organisation


Only material Aspects within the organisation are represented.

G 4-22 Restatements of information provided in previous reports

Disclosed in full No figures were restat-ed within the reporting period. There were no material changes in measurement and calculation proce-dures.

G 4-23 Significant chang-es from previous report-ing periods in the Scope and Aspect Boundaries


Stakeholder Engagement

G 4-24 List of stakehold-er groups

Disclosed in full 3.6.1. Stakeholder En-gagement

G 4-25 Identification and selection of stakeholders with whom to engage


G 4-26 Organisation’s approach to stakeholder engagement


G 4-27 Key topics and concerns that have been raised through stake-holder engagement

Disclosed in full 4.2. Taking into Account Stakeholder Suggestions

Report Profile

G 4-28 Reporting period Disclosed in full Information about the Report


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G 4-29 Date of most re-cent previous report

Disclosed in full The 2012 JSC Atomred-metzoloto Annual Report was published on the Holding's website: www.armz.ru (Shareholders and Inves-tors > Information disclo-sure > Annual Reports) on July 1, 2013.

G 4-30 Reporting cycle Disclosed in full Information about the Report

G 4-31 Contact point Disclosed in full Appendix 2. Table of Standard GRI Disclosures

G 4-32 GRI Content Index table

Disclosed in full Appendix 2. Table of Standard GRI Disclosures

G 4-33 External assur-ance of the Report

Disclosed in full 4.3. Statement of Public Assurance

Governance

G4-34 Governance struc-ture

Disclosed in full 2.2.1. Corporate Govern-ance, 2.2.3. Risk Manage-ment, 3.2.2. Investment Activity

Ethics and Integrity

G4-56 Values, principles, standards, and norms of behaviour

Disclosed in full 2.1.1. Corporate Mission and Values, Appendix 5. Report on Compliance with the Code of Corpo-rate Conduct

Specific Standard Disclosures: Indicators

Category: Economic. Aspect: Economic Performance

EC1 Direct economic value generated and distributed

Disclosed in full 2013 Key Performance Indicators, 3.2.1. Finan-cial Management, 3.4.4. Remuneration System, 3.4.5. Social Policy of the Company, 3.6.2. Develop-ing Regions of Operation, 2.2.1. Corporate Govern-ance


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EC3 Coverage of the organisation’s defined benefit plan obligations

Disclosed in full 3.4.5. Social Policy of the Company

Category: Economic. Aspect: Market Presence

EC5 Ratios of stand-ard entry level wage by gender compared to local minimum wage at significant locations of operation

Disclosed in full 3.4.4. Remuneration System

Category: Environmental. Aspect: Overall

EN31 Total environmental protection expenditures and investments by type

Disclosed in full 3.7.6. Expenses Related to Environment Preser-vation

Category: Social. Aspect: Employment

LA1 Total number and rates of new employ-ee hires and employee turnover by age group, gender, and region

Disclosed in part 3.4.3. Human Capital Features

Information on new employee hires is not collected.

LA2 Total number and rates of new employ-ee hires and employee turnover by age group, gender, and region

Disclosed in full 3.4.5. Social Policy of the Company

Category: Social. Aspect: Occupational Health and Safety

LA6 Type of injury and rates of injury, occupational diseases, lost days, and absentee-ism, and total number of work-related fatalities, by region and by gender

Disclosed in part 3.4.10. Occupational health and safety

No statistics by gender and region are kept.


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Category: Social. Aspect: Training and Education

LA9 Average hours of training per year per employee by gender and by employee category

Disclosed in part 3.4.6. Training and Devel-opment

Average hours of train-ing per gender are not registered.

LA10 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings

Disclosed in full 3.4.6. Training and Devel-opment

Support of further employment and career ending management through retirement or quitting work is provided within the framework of the Labour Code.

Category: Society. Aspect: Public Policy

SO6 Total value of po-litical contributions by country and recipient/beneficiary

Disclosed in full No monetary or non-monetary political contributions were made.


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Appendix 3. Table of Disclosures as per the Reporting Standard of Rosatom State Corporation

Indicator designation Indicator Report section

2.1 Economic performance 2.1.1 Profit 3.2. Financial Capital Man-agement

2.1.3 Financial stability

2.3 Production capacities development

2.3.1 Investment in equity within the report-ing period

3.2.2. Investment Activity

9.1 Availability of qualified and competent workforce

9.1.1 Availability of qualified workforce 3.4. Human Capital Manage-ment

9.1.2 Employee training

10.1 Economic performance 10.1.1 Direct economic value generated and distributed, including revenues, operating costs, employee wages and benefits, contri-butions and other investment in societies, undistributed profits, payments to providers of capital, and payments to government ЕС1 GRI

3.2. Financial Capital Man-agement, 3.4. Human Capital Management, 3.6.2. Develop-ing Regions of Operation

10.3 Indirect economic im-pact

10.3.1 Development and impact of invest-ments in infrastructure and services sup-ported for the public good in the first place, through commercial, in-kind, or pro bono engagements ЕС7 GRI


11.2 Consumption of materi-als, power, and water

11.3.10 Total weight of waste by type and disposal method EN23 GRI

3.7.5. Waste Treatment

12.1 Employment 12.1.1 Total number of employees by employ-ment type, employment contract, and region 4-10 GRI

3.4. Human Capital Manage-ment

12.1.2 Total number and employee turnover by age group, gender, and region LA1 GRI


12.1.4 Share of specialists aged under 35 3.4. Human Capital Manage-ment

12.1.7 Ratios of standard entry level wage compared to local minimum wage at signifi-cant locations of operation EC5 GRI



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Indicator designation Indicator Report section

12.3 Employee social benefits 12.3.1 Benefits provided to full-time employ-ees that are not provided to temporary or part-time employees, by significant locations of operation. LA2 GRI


12.3.5 Total expenses on employee social pro-grammes

12.4.2 Type of injury and rates of injury, occu-pational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender LA6 GRI


12.4.5 Monitoring of personnel radiation expo-sure


13.4 Charity 13.4.1 Charity projects and amount of invest-ment under such projects



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Appendix 4. Auditor’s Opinion on Financial Statements Accuracy

Auditor’s Opinion

To the Shareholders and Board of Directors of JSC Atomredmetzoloto

We have audited the attached consolidated financial statements of JSC Atomredmetzoloto and its subsidi-aries (hereinafter referred to as the “Group”) consist-ing of the consolidated financial position report as of December 31, 2013 and consolidated profit and loss statement and statements of other aggregate income, changes in equity and cash flows in 2013, as well as comments offering a summary of the Group’s ac-counting policy and other explanatory information.

Responsibility of the management of the audited entity for the consolidated financial statements

The management of the audited entity is responsi-ble for the preparation and accurate presentation of these consolidated financial statements in accordance with the International Financial Reporting Standards, as well as for such internal control as the manage-ment deems necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibilityOur responsibility is to express our opinion on the

accuracy of these consolidated financial statements based on our audit. We conducted our audit in accord-ance with Russian federal auditing standards and the International Standards on Auditing. These standards require that we comply with ethical norms and plan and perform the audit so as to obtain reasonable as-surance about whether the consolidated financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence supporting the amounts and disclosures in the consolidated financial statements. The proce-dures selected depend on the professional judgement of the auditor, including an assessment of the risks of material misstatement, whether due to fraud or er-ror. In assessing this risk, the auditor considers the system of internal controls relevant to the preparation and accurate presentation of the consolidated finan-cial statements in order to draft the appropriate audit procedures, but not for the purpose of expressing an opinion on the effectiveness of internal controls. An

audit also includes evaluating the appropriateness of accounting policies adopted and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of (consoli-dated) financial statements.

We believe that the audit evidence we have obtained in our audit serves as a reasonable basis for express-ing our audit opinion on the accuracy of these consol-idated financial statements.

OpinionIn our opinion, the consolidated financial state-

ments fairly present in all material respects the finan-cial position of the Group as of December 31, 2013, and the results of its operations and its cash flows for 2013 in accordance with International Financial Re-porting Standards.

K. AltukhovDirector (Power of Attorney No. 65/13 dated October 1, 2013)ZAO KPMGMay 30, 2014Moscow, Russian Federation


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Appendix 5. Report on Compliance with the Code of Corporate Conduct

The Report was prepared according to the form set by the Guidelines on the Contents and Form of the Re-port on Compliance with the Code of Corporate Con-

duct Included in Annual Reports, as approved by Rus-sian Federal Securities Market Commission Decree No. 03-849/р dated April 30, 2003.

No. Article of the Code ofCorporate Conduct

Compliant ornon-compliant

Note

Observance of Shareholders’ Rights

1 Observance of the rights and lawful interests of the shareholders in ac-cordance with the laws of the Russian Federation and observance of the fundamental provisions of the Code of Corporate Conduct shall be ensured

Compliant When a general meeting of sharehold-ers is convened, the periods of notice to hold such meetings are observed and the shareholders exercise the following rights: to familiarise themselves with the list of persons entitled to participate in the general meeting of shareholders; to review the materials (information) on the general meeting of shareholders; and to add issues to the agenda of the general meeting of shareholders

Board of Directors

2 The Charter of the joint stock compa-ny shall provide for the power of the Board of Directors to annually approve the financial and economic plan of the joint stock company

Compliant In accordance with paragraph 13.2(25) of the Charter, the competence of the Board of Directors includes approval of annual plans, budgets, and estimates for the Company’s activities and related progress reports, and planned financial and economic performance indicators of the Company

3 The Charter of the joint stock com-pany shall provide for the right of the Board of Directors to authorise the suspension of the Director General appointed by the General Meeting of Shareholders

Compliant In accordance with paragraph 13.2 (23) of the Charter, the competence of the Board of Directors includes authorising the for-mation of a temporary sole executive body of the Company in the event of the Direc-tor General’s suspension or inability to discharge his/her duties for any reason, and convening an Extraordinary General Meeting of Shareholders to decide on the early dissolution of the sole executive body of the Company and the formation of a new executive body of the Company


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Note

4 The Board of Directors of a joint stock-company shall include at least three independent directors meeting the requirements of the Code of Cor-porate Conduct

Non-compliant Independent directors were not elected to the Board of Directors of the Company

5 The board of directors of the joint-stock company shall not include persons who were found guilty of eco-nomic crimes or crimes against the government, the interests of public service, and service in local govern-ments; or who were administratively penalised for violations in the field of business activities or in the field of finance, taxes, and duties, or the securities market

Compliant The Board of Directors of the Company does not include such persons

6 The Board of Directors of the joint-stock company shall not include per-sons who are a member, the general director (manager), a member of the governing body, or an employee of a legal entity competing with the joint stock company

Compliant Members of the Board of Directors of the Company do not hold management positions in the governing bodies of any competing company

7 The internal documents of the joint-stock company shall regulate the conduct of the meetings of the Board of Directors

Compliant Section 10 of the Regulations on the Board of Directors of the Company for-malises the basic provisions of the rules governing the meetings of the Board of Directors of the Company

8 The joint-stock company’s internal documents shall stipulate that the Board of Directors must approve joint-stock company transactions worth 10 or more percent of the company’s assets, with the exception of transac-tions effected in the ordinary course of business

Compliant In accordance with paragraph 2.2 (12) of the Regulations on the Board of Direc-tors of the Company, the competence of the Board of Directors includes approval of a major transaction or a number of interrelated transactions, the subject of which are assets accounting for 10% to 50% of the book value of the Company’s assets

9 The Board of Directors of the Compa-ny shall have committees

Non-compliant The Company has not set up any com-mittees of the Board of Directors


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Note

Executive Bodies (Director General)

10 The executive bodies shall not include any person who is a member, the director general (manager), a member of the governing body, or an employee of a legal entity competing with the joint stock company

Compliant The Company has not set up a collective executive body (management board). The Director General of the Company is not a member of the governing body or an employee of a legal entity com-peting with the Company, and was not found guilty of economic crimes, crimes against the government, or other crimes or offences

11 The executive bodies of the joint-stock company shall submit annual reports on their work to the Board of Directors

Partially compliant The Director General submits a report on his/her work to the Board of Directors when duly instructed and requested by the Board of Directors

12 Contracts between the joint-stock company and the general director (management company, manager) and the members of the management board shall provide for liability for the violation of the provisions on the use of confidential and proprietary infor-mation

Compliant The contract with the Director General provides for the Director General’s liabil-ity for the violation of the provisions on the use of confidential and proprietary information

Company Secretary

13 The joint-stock company shall have a specially designated officer (company secretary) whose task is to ensure that the bodies and officers of the joint-stock company comply with procedural requirements protecting the rights and lawful interests of the company’s shareholders

Compliant The Company has an elected corporate secretary who organises the work of the Company’s governing bodies

Significant Corporate Actions

14 The charter or the internal docu-ments of the joint-stock company shall require a major transaction to be approved prior to its consummation

Compliant In accordance with Clauses 12.1, 13.2, and 14.3 of the Charter, the competence of the governing bodies includes approv-al of transactions in cases stipulated by Chapter 10 Major Transactions of Federal Law No. 208-ФЗ on Joint-Stock Companies dated December 26, 1995


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Note

15 An independent appraiser shall be necessarily engaged to estimate the market value of the property that is the subject of a major transaction

Compliant Implemented in practice. The Company engages an independent appraiser to determine the value of the Company’s shares or other assets planned to be disposed of or acquired

Disclosure

16 The joint-stock company shall have a website on which it regularly discloses information

Compliant The Company discharges its duty to dis-close relevant information in accordance with the current laws of the Russian Federation at the website (http://www.disclosure.ru/issuer/ 7706016076/)

Control over Financial and Economic Activities

17 A special unit of the joint-stock com-pany shall operate to ensure compli-ance with the internal control proce-dures (control and audit department)

Compliant The Company has set up an internal control body and elected an audit com-mission, both of which act in accordance with the respective approved regulations

Dividends

18 Dividend distribution Compliant The Company distributes dividends in accordance with the decisions taken by the General Meeting of Shareholders. Dividend distribution details are pub-lished at the website (http://www.disclosure.ru/issuer/ 7706016076/) as part of the Company’s annual reports


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Appendix 6. Terms and Abbreviations

GRI Sustainability Reporting Guidelines, Global Reporting Initiative

M&A Mergers and Acquisitions

U1H Uranium One Holding

SAP SRM Supplier Relationship Management

ACEPIMS Automated commercial eclectic power information and metering system

ATEPIMS Automated technical eclectic power information and metering system

AEPIMS Automated eclectic power information and metering system

AEMS Automated environmental monitoring system

NPP Nuclear power plant

ISLB In situ leaching in blocks

AL Air power lines

RSC CEO Rosatom State Corporation Chief Executive Officer

SCMR State Commission on Mineral Reserves

HMP Hydrometallurgical plant

FP Finished products

GE Geological exploration

S&A subsidiary and associated companies

VME Voluntary medical insurance

CSP Crushing and screening plant

ЕРСМ Engineering, procurement, construction

SURS Single unified remuneration system

UOC Uranium oxide concentrate

IT Information technologies

HL Heap leaching

CGT Consolidated group of taxpayers


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IPSS Integrated physical security system

LWDR Lost work day rate

ODR Occupational diseases rate

KPI Key performance indicators

CSR Corporate social responsibility

CRMS Corporate risk management system

LSU Local sorption unit

IAEA International Atomic Energy Agency

RMB Raw materials base

IFRS International Financial Reporting Standard

Procurement Financial and logistical procurement

R&D Research and development

NRNU MEPhI National Research Nuclear University MEPhI (Moscow Engineering Physics Institute)

NFC IS Initial stage of the nuclear fuel cycle

EIA Environmental impact analysis

PW Pilot work

MWTF Mine water treatment facilities

PTW Pilot technical works

OECD Organization for Economic Cooperation and Development

SAA Surface-active agents

AVCP Automatic voltage control point

ISL In situ leaching

NWBS Nuclear waste burial site

DEW Design and exploration work

EEP Efficiency Enhancement Programme

PS Product solution

DISL Downhole in situ leaching


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DSE Design specifications and estimates

RPS Rosatom Production System

NW Nuclear waste

RR Repair and restoration

REE Rare earth metals

Rosnedra Federal Subsoil Resources Management Agency

AS Average salary

SAP Sulphuric acid plant

TDES Technical data exchange system

JV Joint venture

SRO Self-regulating organisations

FPS Fuel and power sector

FS Feasibility study

TPP Thermal power plant

TSC Transport and storage containers

FSTEC Federal Service for Technical and Export Control

FFMS Federal Financial Markets Service

FTP Federal target programme

KhOF Khiagda ore field

CPB Central procurement base

CPS Central production site

FCD Frequency-controlled drive

LF Launch facility

NFC Nuclear fuel cycle

NPC Nuclear power complex


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Feedback QuestionnaireFeedback: We’d love to know your opinion.

You have studied the 2013 JSC Atomredmetzoloto Annual Report. We would like to know your opinion of it. Please answer several simple questions to help us improve our reporting quality.

1. Did you find significant information about your concerns in the Report?

Yes No I only flicked through the Report.

What was most important personally for you? In your opinion, what does the Report lack?

2. Does the information disclosed in the JSC Atomredmetzoloto Report facilitate better engagement with the Company?

Yes No I am not concerned about it.

What information did you find most useful and what was lacking?

3. What sections of the Report were most interesting to you?

4. What sections of the Report were least interesting to you?

5. What is your opinion about the accuracy and fairness of the Report?

6. Would you like to read the next JSC Atomredmetzoloto report?

Yes No

7. What would you like the next report to be like?

8. What recommendations on the Holding and its S&A performance improvement would you like to give?


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9. Other comments.

10. Please indicate what group of stakeholders you represent (you can select no more than two options):

Shareholder Investor

Contractor/supplier Company operating in the same industry

Business customer Small and medium business representative

Federal state authority Regional state authority representative representative

Local government body Non-state environmental representative organisation representative

Representative of a business association Mass media representativeor another non-governmental organisation

ARMZ Uranium Holding Co. employee Employee of a Holding’s subsidiary or affiliate

Other (please specify)

11. To receive a reply to your comments, please indicate your contact details (full name, post box, zip code, phone number, e-mail), and we will contact you.

Thank you!

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Contact InformationFull company name Joint Stock Company Atomredmetzoloto

Short company name JSC Atomredmetzoloto

Location of headquarters (principal business office) and post address

22 Bolshoy Drovyanoy Per., Moscow, 109004 Russia

T/F (495) 508-88-08/508-88-10

E-mail [email protected]

Registering authority, registration number and date

Moscow Registration Chamber, No. 004.997 dated 22.02.1995

OGRN (Principle State Registration Number)

1027700043645

INN (Taxpayer Identification Number)/KPP (Tax Registration Reason Code)

7706016076/774850001

Main type of activities Geologic exploration and production of natural resources, including resources containing nuclear and radioactive materials, and uranium concentrate production

Website http://www.armz.ru

Auditor and Registrar Open Joint-Stock Company R.O.S.T. RegistrarRegistrar’s details:OGRN (Primary State Registration Number) 1027739216757, INN (Taxpayer Identification Number) 7726030449.Located at: 18 Stromynka Ul., Bldg. 13, Moscow, RussiaT/F: (495) 771-73-36.

Ivan Krupyanko Head of Public and Regional Authorities Relations Department ARMZ Uranium Holding Co. (JSC Atomredmetzoloto)22 Bolshoy Drovyanoy Per., Moscow, 109004 RussiaT: +7-495-508-8808, ext. 177F: +7-495-508-8810E-mail: [email protected]

Victoria Dolina Annual Report Project Manager ARMZ Uranium Holding Co. (JSC Atomredmetzoloto)22 Bolshoy Drovyanoy Per., Moscow, 109004 RussiaT: +7-495-508-8808, ext. 146F: +7-495-508-8810E-mail: [email protected]

armz annaul report 2013 eng ver

Documents

production capital management

natural capital management

human capital management

social capital management

financial capital management

financial management

risk management

procurement management