Q2 Production Report

1 August 2012

Eurasian Natural Resources Corporation PLC

Production Report for the Second Quarter ended 30 June 2012

The information in this Production Report, unless stated otherwise, relates to the three months ended 30 June 2012, and is compared to the corresponding three month period of 2011.

Production levels in the Ferroalloys Division were slightly above the previous quarter yet operated slightly below their full available capacity. The Iron Ore Division operated at below full available capacity. This was due to a temporary decline in ore quality as well as repairs to our own railways, which resulted in lower volumes of ore available for processing. The Alumina and Aluminium Division operated at full available capacity for aluminium production and below full available capacity for alumina production due to processing problems at the refinery in Q1 2012. In the Other Non-ferrous Division, copper contained production showed strong growth against the corresponding period of 2011, while cobalt contained volumes decreased in the same period. The Energy Division operated at full available capacity for the quarter.

·; Ferroalloys Division.Total saleable production of ferroalloy products was slightly above the previous quarter but decreased 1.3% versus Q2 2011, mainly due to a 3.6% decrease in high carbon ferrochrome production. Ferrosilicochrome and silicomanganese production increased by 26.7% and 4.4% respectively, while the production of medium- and low-carbon ferrochrome and saleable ferrosilicon remained stable.

·; Iron Ore Division.Iron ore extraction and primary concentrate production decreased by 6.8% and 13.5%, respectively, against the comparable period. The total volume of saleable product decreased 12.3% against Q2 2011.

·; Alumina and Aluminium Division. Bauxite extraction decreased 3.2% and alumina production decreased 8.1% against Q2 2011 as a consequence of processing problems at the alumina refinery in Q1 2012. Alumina production returned to full capacity in June. Aluminium production was in line with Q2 2011.

·; Other Non-ferrous Division. Production of saleable copper in Q2 2012 was 8,505 t, a 15.5% increase versus Q2 2011. At 2,490 t, saleable cobalt production was 1.9% below Q2 2011.

·; Energy Division. Coal extraction by EEC increased 0.7% compared to Q2 2011. Electricity generation increased 3.6% and sales to third-parties increased 35.9% compared with Q2 2011. Shubarkol volumes reported for the first time on a consolidated basis (since May 1, 2012): coal extraction volumes of 927 kt and special coke production of 34 kt.

·; Logistics Division.The volume of goods transported by rail decreased by 10.0% compared to Q2 2011 due mainly to coal volumes to Russia being transported by customers using their own railcars. The proportion of volumes attributable to third parties decreased by 4.6 percentage points compared with Q2 2011.

Felix J Vulis, Chief Executive Officer, said "We are pleased to report recoveries in production of both ferroalloys and alumina after problems experienced earlier in the year, as well as a material ramp up in copper production in Africa. Shubarkol volumes are reported here for the first time and we expect its operations to make a meaningful contribution to the Group's earnings going forward. Overall, the outlook for demand of our products remains strong despite the challenging market conditions."

Felix J Vulis, Chief Executive Officer

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About ENRC

ENRC is a leading diversified natural resources group, performing integrated mining, processing, energy, logistics and marketing operations. The operations comprise: the mining and processing of chrome, manganese and iron ore; the smelting of ferroalloys; the production of iron ore concentrate and pellet; the mining and processing of bauxite for the extraction of alumina and the production of aluminium; the production of copper and cobalt; coal extraction and electricity generation; and the transportation and sales of the Group's products. The Group's production assets are largely located in the Republic of Kazakhstan; other assets, notably the Other Non-ferrous Division, are mainly located in Africa; the Group also has iron ore assets in Brazil. The Group's entities in 2011 employed on average 77,441 (2010: 74,098) people. The Group currently sells the majority of its products to Russia, China, Japan, Western Europe and the United States. For the twelve months ended 31 December, 2011, the Group had revenue of US$7,705 million (2010: US$6,605 million) and profit attributable to equity holders of the Company of US$1,974 million (2010: US$2,185 million). ENRC has six operating Divisions: Ferroalloys, Iron Ore, Alumina and Aluminium, Other Non-ferrous, Energy and Logistics. ENRC is a UK company with its registered office in London. ENRC's shares are quoted on the London Stock Exchange ('LSE') and the Kazakhstan Stock Exchange ('KASE'). For more information on ENRC visit the Group's website at www.enrc.com.

Forward-looking Statements

This announcement includes statements that are, or may be deemed to be, 'forward-looking statements'. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms 'believes', 'estimates', 'plans', 'projects', 'anticipates', 'expects', 'intends', 'may', 'will', or 'should' or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include matters that are not historical facts or are statements regarding the Group's intentions, beliefs or current expectations concerning, among other things, the Group's results of operations, financial condition, liquidity, prospects, growth, strategies, and the industries in which the Group operates. Forward-looking statements are based on current plans, estimates and projections, and therefore too much reliance should not be placed upon them. Such statements are subject to risks and uncertainties, most of which are difficult to predict and generally beyond the Group's control. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. The Group cautions you that forward-looking statements are not guarantees of future performance and that if risks and uncertainties materialise, or if the assumptions underlying any of these statements prove incorrect, the Group's actual results of operations, financial condition and liquidity and the development of the industry in which the Group operates may materially differ from those made in, or suggested by, the forward-looking statements contained in this announcement. In addition, even if the Group's results of operations, financial condition and liquidity and the development of the industry in which the Group operates are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in future periods. A number of factors could cause results and developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and business conditions, industry trends, competition, commodity prices, changes in regulation, currency fluctuations, changes in business strategy, political and economic uncertainty. Subject to the requirements of the Prospectus Rules, the Disclosure and Transparency Rules and the Listing Rules or any applicable law or regulation, the Group expressly disclaims any obligation or undertaking publicly to review or confirm analysts' expectations or estimates or to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any changes in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Nothing in this announcement should be construed as a profit forecast. The forward looking statements contained in this document speak only as at the date of this document.

Disclosure and Transparency Rules

The Production Report is prepared to meet the requirements of the Disclosure and Transparency Rules of the United Kingdom Financial Services Authority ('FSA') to provide additional information to shareholders. The Production Report should not be relied on for any other purpose or by any other party.

A copy of this announcement will be available on the Group's website at www.enrc.com.

FERROALLOYS DIVISION

Ore Mining and Processing

1Q2 2011 numbers adjusted to exclude Tuoli consumption

Chrome ore extraction in Q2 2012 amounted to 1,267 kt, an increase of 5.0% on Q2 2011 and 17.2% on Q1 2012. The Division produced 974 kt of saleable chrome ore, an increase of 1.6% on Q2 2011 and 29.0% against Q1 2012.

Internal consumption of saleable chrome ore in Q2 2012 decreased 3.4% versus the comparable period of 2011 and increased 0.3% against Q1 2012, reflecting the changes in ferrochrome production (see page 5 for further details).

Manganese ore extraction increased 1.8% versus Q2 2011 and 21.4% versus Q1 2012. Saleable manganese concentrate production decreased by 3.6% compared to Q2 2011 due to changes in market demand and increased 54.0% against Q1 2012, mainly reflecting a seasonal increase in fine concentrates market demand.

Production at Zhairem GOK, which mainly sells manganese concentrates for export, decreased 12.9% to 155 kt (34.0% Mn) against Q2 2011 (178 kt; 32.9% Mn) but increased 15.7% compared to Q1 2012 (134 kt; 35.6% Mn), reflecting an increase in seasonal market demand. Production at Kazmarganets (38.6% Mn), which supplies manganese concentrate to the Aksu ferroalloys plant for use in silico-manganese production, amounted to 116 kt, an increase of 11.5% from Q2 2011 (104 kt; 38.9% Mn) and 176.2% from Q1 2012 (42 kt; 42.0% Mn). The proportion of total manganese concentrate production consumed internally was slightly higher in Q2 2012, at 37.3% (Q2 2011: 37.0%) and decreased by 19.6% against Q1 2012.

Ferroalloys Production

Note: Table may not sum precisely due to rounding.

1Q2 2011 numbers adjusted to exclude Tuoli.

In Q2 2012, the Ferroalloys Division produced 377 kt of saleable ferroalloys, a 1.3% decrease from Q2 2011 but a 0.5% increase from Q1 2012. The decrease versus Q2 2011 in total saleable production was comprised of a reduction in high-carbon ferrochrome production.

The decrease in high-carbon ferrochrome production versus Q2 2011 was due to repair works at Aksu Furnaces 61 and 62. Repairs works were completed during the quarter.

Ferrosilicochrome saleable production increased 26.7% compared to Q2 2011. Ferrosilicon production was stable against Q2 2011 while silicomanganese saleable production increased 4.4% against Q2 2011.

Serov contributed 58 kt of saleable ferroalloy production in Q2 2012 (Q2 2011: 59 kt; Q1 2012: 57 kt).

IRON ORE DIVISION

In Q2 2012, the Iron Ore Division extracted 9,893 kt of iron ore, a decrease of 6.8% on Q2 2011 (10,617 kt) and 3.0% on Q1 2012 (10,204 kt). The Division produced 3,890 kt of primary concentrate, a decrease of 13.5% on Q2 2011 and 6.9% compared to Q1 2012. The decrease in primary concentrate production in Q2 2012 was as a result of a temporary decline in ore quality as well as repairs to our own railways, which resulted in lower volumes of ore available for processing. 

Saleable concentrate production (with an iron content of 65.4%) was 1,803 kt, a decrease of 10.0% compared to Q2 2011 (2,004 kt) and 10.8%, or 218 kt, compared to Q1 2012 (2,021 kt). Pellet production (with an iron content of 62.7%) was 1,796 kt, a decrease of 14.4% on Q2 2011 (2,098 kt) and 5.0% on Q1 2012 (1,891 kt). The decrease in concentrate and pellet production against Q2 2011 was due to lower ore volumes available for processing. Total saleable product volumes were 12.3% and 8.0% lower than Q2 2011 and Q1 2012 respectively.

ALUMINA AND ALUMINIUM DIVISION

In Q2 2012, bauxite extraction was 3.2% lower than in Q2 2011 and 4.1% higher than in Q1 2012. Alumina production decreased 8.1% versus Q2 2011 but increased 13.9% versus Q1 2012. The production problems caused by interruptions to the supply of soda ash in Q1 2012 were resolved with alumina production returning to full capacity in June 2012. Bauxite extraction decreased year on year in line with the reduced alumina production requirements.

Internal consumption of alumina amounted to 120 kt (in line with Q1 2012) representing 31.9% of total alumina production and consistent with the aluminium smelter running at its full 250 ktpa capacity.

Primary aluminium production in Q2 2012 was 62 kt, with no change against the previous comparable periods.

Electricity generation in Q2 2012 increased 3.3% against Q2 2011 but decreased 23.9% compared with Q1 2012 due to seasonal factors. Supply of electricity to other Group Divisions increased 8.3% against Q2 2011 but decreased 40.7% against Q1 2012 again reflecting seasonal factors and a decrease in power generation during the warmer months. Electricity supply to third-parties decreased 2.9% against Q2 2011 and 38.2% against Q1 2012.

OTHER NON-FERROUS DIVISION

Copper and Cobalt Production

Note: 1. Production numbers for saleable copper and cobalt refer to tonnes of contained metal. Contained metal consists of total units, whether in metal form or metal units contained in concentrate and sludge, net of internal consumption, but excludes copper contained in cobalt concentrate.

Copper ore extraction for the quarter was 14.2% higher than in Q2 2011 and slightly below Q1 2012. The increase is primarily attributable to additional copper ore realised from the Kabolela South and Kakanda North pre-stripping programme. Kabolela North extraction decreased slightly from Q1 2012, in line with processing availability at the plant which has been constrained by power availability.

The higher grades achieved at Kabolela North in Q1 continued through Q2 resulting in a 21% increase in grade quarter on quarter.

Saleable copper contained for the quarter was 15.5% higher than Q2 2011 and 5.4% lower than Q1 2012. The increase was primarily due to higher extraction and grades achieved, whereby the lower extraction compared to Q1 2012 was mainly due to power availability constraints.

Cobalt ore extraction was adversely impacted by a delay in exposing sulphide ore at Kabolela South. The grades achieved at Kabolela South and Mukondo in Q2 2012 increased by 8% and 16% compared with Q2 2011 and Q1 2012 respectively.

Saleable cobalt contained for the quarter was 1.9% lower than in Q2 2011 and 4.4% lower than Q1 2012 as a result of greater internal consumption of Boss cobalt concentrate at Chambishi.

ENERGY DIVISION

Note: 1. Electricity consumption and supply numbers may not round precisely due to the purchase of small volumes of electricity from third-parties. 2. Numbers provided on a fully consolidated basis from May 1, 2012.

In Q2 2012, EEC extracted 4,392 kt of coal from the Vostochny mine, an increase of 0.7% versus Q2 2011 and a decrease of 25.1% on Q1 2012 as a result of seasonal demand.

From May 1, Shubarkol numbers are reported on a fully consolidated basis. Coal extraction in the period was 927 kt and special coke production was 34 kt.

Electricity generation in the period was 3,229 GWh, an increase of 3.6% on Q2 2011, resulting from 25MW additional capacity installed at the end of June 2011, and a decrease of 18.2% on Q1 2012 due to changes in seasonal demand.

Electricity supplied by the Energy Division to other Group Divisions was 2,544 GWh, a slight decrease of 0.5% on Q2 2011 and increased 1.9% from Q1 2012.

Third party electricity sales of 435 GWh increased 35.9% compared to Q2 2011 and decreased 62.7% against Q1 2012, reflecting the change in balance between electricity generation and internal consumption.

LOGISTICS DIVISION

In Q2 2012, the Logistics Division transported 13,681 kt by rail, a decrease of 10.0% compared to Q2 2011 and 6.8% against Q1 2012. Since Q1 2012, coal shipments to Russia are being transported by our customers' own fleets.

A smaller proportion of third-party volumes were transported in Q2 2012 (9.4%) than in the comparable period (Q2 2011: 14.0%).

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