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JSC TECHSNABEXPORT (TENEX) - The Leading Russian Supplier of Nuclear Fuel Cycle Products and Services

April, 2011

Moscow

TENEX on the World Nuclear Fuel Market: Looking into the Future

Andrey TovstenkoHead of Marketing and Business Strategy DirectorateJSC TECHSNABEXPORT

ATOMEXPO-2013Saint Petersburg, Russia, June 2013

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1963

1971

1973-1976

1987

1990

1993

1995

1999

2009

2012

TENEX Market Chronology

UAE

USA(Resumption of Commercial Activity in accordance with the Amendment to the Suspension Agreement)

Japan

South Africa

Republic of Korea

The Beginning of Natural Uranium Deliveries to theUSA & Europe

USA

Europe (other countries)

France(The first SWU Contract)

TENEXestablishment

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TENEX’s Market Presence Evolution

1975 2000 20120%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

9%

31% 33%

91%

69% 67%

TENEX Others

1975 2000 2012

100%

38%48%

57% 36%

5%16%

Europe America Asia-Pacific and Africa

Western SWU market structure

TENEX has gained a significant share of the global market for the NFC goods and services. Its geographical market presence gradually becomes more diversified

Geographical Structure of TENEX’s Export

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Key Market Trends: Nuclear Power Development

Referenced sources forecast long-term growth of nuclear energy in all scenarios (excl. WNA low),

Asian countries, inclusive China, India and Middle East will be the main drivers for nuclear energy.

Growth rate will mostly depend on such factors as energy consumption, competition from other energy sources (gas, oil, etc.) and ecological aspects.

The general increase of NPPs fleet will result from the fact that this industry provides clean and reliable source of energy.

America Europe Asia&Africa0

50

100

150

200

250

300

120 11482

137 112

274

Non-Russian Design Nuclear Capacities

2013 2030

Gwte

2013, June 2015 2020 2025 2030240

290

340

390

440

490

540

590

640

690

740

790

840

WNA-2011 ref, IAEA-2012 ref, UxC-2013 ref, WEO-2012

WNA-2011 (upper)

WNA-2011 (low)

UxC-2013 (high)

UxC-2013 (low)

IAEA-2012 (max)

IAEA-2012 (min)World372.7

Non-Russian Design Reactors316

World Nuclear Generation CapacitiesGWte

Source: Uranium Requirements Model published in UxC URM Report Q1 2013.

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Key Market Trends: Enrichment & Natural Uranium

• Nuclear newcomers from emerging markets drive demand increased demand for integrated products • Transition period from gas diffusion to gas centrifuge completed in the long-term suppliers will compete in new market environment

• Number of suppliers increases [Ex.: enrichment services sellers to US utilities: 5 in 2005, 7 in 2009, 11 in 2012 (source: EIA)]

competition increases approved and reliable suppliers preferred

• Downward pressure on natural uranium and SWU prices during recent period

possible market instability in the mid-term

• Kazakhstan is making the great contribution in the world uranium mining while many miners in other countries have cancelled or delayed expansion of uranium production

100

110

120130

140

150160

170

Ux SWU Price

3035404550556065707580

Ux NatU LTUx NatU Spot

SWU Prices, $/SWU

Natural uranium prices, $/lb

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Key Market Trends: Possible Instability

January 200404 Декабрь 05 Ноябрь 06 Октябрь 07 Сентябрь 08 Август 09 Июль 10 Июнь 11 Май 12 Апрель 13 Март0

20

40

60

80

100

120

140

160

Natural Uranium Spot Price Since 2004

$/lb

Low Price Periods

Price Spikes

Periods of low-price lead to discourage of producers and make them to decrease production. This in its turn result in lack of material on the market, price spikes and unstable market situation

Fair price level provides sustainable market development and therefore it is favorable both for suppliers and customers (this is also true in case of SWU market)

Janu

ary

2004

Apr

il 20

04Ju

ly 2

004

Oct

ober

200

4Ja

nuar

y 20

05

Apr

il 20

05

July

200

5O

ctob

er 2

005

Janu

ary

2006

Apr

il 20

06Ju

ly 2

006

Oct

ober

200

6Ja

nuar

y 20

07

Apr

il 20

07Ju

ly 2

007

Oct

ober

200

7Ja

nuar

y 20

08

Apr

il 20

08Ju

ly 2

008

Oct

ober

200

8Ja

nuar

y 20

09A

pril

2009

July

200

9O

ctob

er 2

009

Janu

ary

2010

Apr

il 20

10Ju

ly 2

010

Oct

ober

201

0Ja

nuar

y 20

11

Apr

il 20

11Ju

ly 2

011

Oct

ober

201

1

Janu

ary

2012

Apr

il 20

12Ju

ly 2

012

Oct

ober

201

2Ja

nuar

y 20

13A

pril

2013

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Market Trends: SWU Market Supply/Demand Balance (World market without the segment of Russian Design Reactors)

By the end of the current decade considerable amount of primary (Western) and quasi-primary (HEU-LEU) supply exits the market (over 20M SWU), ~25M SWU new capacity is expected to come on stream

Net supply increase is forecasted at 5.2 M SWU, as net demand increase will amount 18.9 M SWU For the sustainable SWU market development it is critical to fill the gap by mainly primary sources of supply Russian Enrichment Industry is capable to contribute to this task both in medium- and long-term perspective

Change in Non-Russian reactors SWU demand, primary (effective capacities) and quasi-primary (HEU-LEU) supply (excluding Russian commercial EUP/SWU export) by 2020, 2010 = base year

Supply Demandmln. SWU

-10

-20

-30

10

20

30

Totalout:-20.4

Totalin:

+25.6Net:+18.9

GB I- 8

Paducah-6

HEU-6.4

Net:+5.2

ETC+ 16

Otherexpansions

+ 5.6

ACP, SILEX+ 4

Sources:- Demand: Uranium Requirements Model published in UxC URM Report Q1 2013, recalculated at current optimal tails assay (0.223%)- Supply: UxC Enrichment Market Outlook Q1 2013 (expected

enrichment supplies) and TENEX estimates (old GDP projects)

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Main Direction

s

Direct relationship with utilities

Priority to long-term contracts

Promotion of products with the maximum added value

Strategic partnerships with nuclear fuel cycle products and services suppliers

Flexible approaches based on priorities of the clients

Overseas sales network

Advantages of Russian geographical location

Transport and logistics infrastructure

Overseas stockpiles of uranium

Specific attention to regional market features

TENEX Business Development

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Market Instruments: Recent Developments (1)

Material Account System Development

Legal framework on the importation of uranium from Australia, Canada and the U.S. to Russia, “1-2-3 Agreement” between Russia and Japan

First shipment of natural uranium from Australia in November 2012

First shipment of Russian EUP through Russian Far East Port in October 2012

Opening of TENAM Corporation office in Washington DC

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Conversion-enrichment plant

Tokyo Port, Japan

EUP trial delivery to Japan through Russian Far East Port

Enrichment plant

Adelaide Port, Australia

Far East Port, Russian

Federation

Saint-Petersburg Port,

Russian Federation

Natural Uranium Trial Delivery to the Russian

Federation from Australia

Market Instruments: Recent Developments (2)

Material stock accounts system Enhancement

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Market Instruments: Recent Developments (3)

EUP Trial Delivery demonstrated the efficiency of new Russian Far East Nuclear Materials Transportation Route

Vostochny Port

Transport and logistics infrastructure development: Far East Nuclear Materials Transportation Route

Implementation of the Enriched Uranium Product Trial Delivery through Russian Far East Port

Start of activities in Far East in 2010

Russian port of Delivery: Vostochny port

Delivery time: reduced about 3 times Experience in obtaining of all necessary licenses and authorizations in Russia

(including licenses for stevedoring company in Vostochny port and for sea carrier)

IZOTOP Company assistance for trial delivery via Vostochny port

Partnering with the largest Far East Container Terminal – LLC “Eastern Stevedoring Company”

Benefits: - Shipping points diversification- Reliability of supply improving

- Delivery time shortening- European NFC products and services transit to Asia is

possible

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Development of the Natural

Uranium Delivery System

November 2012 - The first shipment of Australian natural uranium to the Russian Federation under a 2007 bilateral nuclear cooperation agreement

Benefits: Enriched uranium and enrichment services contracts with increased contract terms flexibility in regards of using customer owned natural uranium of different origins

Material Account System

Delivery Management Agreements with all US and European Fuel Fabricators

Further Flexibilities Development in Process

Benefits:More flexibility in delivery terms

Improvement of the service quality in the field of nuclear materials transportation and product delivery

Market Instruments: Recent Developments (4)

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TENEX’s Overseas Sales Network

TENEX-Korea (Seoul, Republic of Korea)

INTERNEXCO(Frankfurt, Germany)

TENEX-Japan(Tokyo, Japan)

TENAM(Bethesda, USA)

TRADEWILL(London, United Kingdom)

2012

TENEX-Japan – the first direct contract execution with the delivery at Japanese fabricator

TENAM Corp. – Signing of EUP supply contract with a US utility under the Russian Suspension Agreement, as amended

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THANK YOU FOR YOUR ATTENTION !