1. JSC "NIKOMAG" STRATEGIC DEVELOPMENT PLAN JSC “NIKOMAG” GROUP OF COMPANIES NIKOCHEM JSC "NIKOMAG" 400097, Volgograd, str. 40 let VLKSM, 57, tel.: +7 (8442) 406990, fax: +7 (8442) 406010, e-mail: market@kaustik.ru

2. JSC "NIKOMAG" was founded in 2006 in order to make a separate direction of the integrated bischofite processing program being realized within Group of Companies NIKOCHEM development strategy. In 2006, the company started up a magnesium chloride flakes and prills production complex with capacity 30 thousand tons/year. As of today, JSC "NIKOMAG" is the largest magnesium chloride prills producer on the territory of the Russian Federation. The company is developing the deicing segment very actively - now bischofite (magnesium chloride) and the solid DIA GreenRide are in the range of produced goods. The formulations of the produced reagents are constantly improved thanks to research activities carried out. The icemelter GreenRide is actually a state-of-the-art MULTICOMPONENT material for winter slipperiness control, having higher melting ability and lower corrosivity compared with analogs. At the moment, a big investment project is being realized together with JSC RUSNANO. The main products of the project will be nanostructured magnesium hydroxide with modified surface used as an effective environmentally safe flame retardant and smoke suppressant and high-purity magnesium oxide. As of today, Russian demand for these products is met by import supplies from Europe, USA and Israel. The project also foresees solid magnesium chloride grades production capacity increase up to 60 thousand tons/year. ABOUT THE COMPANY JSC "NIKOMAG" 400097, Volgograd, str. 40 let VLKSM, 57, tel.: +7 (8442) 406990, fax: +7 (8442) 406010, e-mail: market@kaustik.ru 2 ABOUT THE COMPANY JSC "NIKOMAG" STRATEGIC DEVELOPMENT PLAN JSC “NIKOMAG”

3. PRODUCTS OF THE PROJECT: nanostructured magnesium hydroxide, high-purity magnesium oxide, bischofite (magnesium chloride). DESIGNED CAPACITY: Ιfor magnesium hydroxide - 25 thousand tons/year; Ιfor magnesium oxide - 30 thousand tons/year; Ιfor magnesium chloride – 30 thousand tons/year (addittionally to the existing plant). RAW MATERIAL SUPPLY: For nanostructured magnesium hydroxide and high-purity synthetic magnesium oxide production bischofite brine containing high-purity magnesium chloride will be used. Explored bischofite reserves и received licenses for mining it guarantee raw material supply for the project during the next 150 years. CURRENT STATE: in realization stage, production startup is in the 1st quarter of 2015 GENERAL CHARACTERISTICS OF THE PROJECT 3 ABOUT THE PROJECT JSC "NIKOMAG" 400097, Volgograd, str. 40 let VLKSM, 57, tel.: +7 (8442) 406990, fax: +7 (8442) 406010, e-mail: market@kaustik.ru JSC "NIKOMAG" STRATEGIC DEVELOPMENT PLAN JSC “NIKOMAG”

4. ￜ RAW MATERIALS. Near magnesium chloride (bischofite) deposit and own-produced caustic soda. For nanostructured magnesium hydroxide production bischofite brine coming through a pipeline from Svetloyarskoye Deposit and containing high-purity magnesium chloride will be used, which ensures minimum brine purification expenses. ￜ INFRASTRUCTURE. The industrial site of Group of Companies NIKOCHEM in Volgograd has a highly developed infrastructure with reserve capacities regarding heat and electric energy, treatment facilities, maintenance services etc. which will be used in the project with the according efficiency increase. ￜ LOGISTICS. Easy access to transport junctions for exports and physical proximity of major industrial centers of the Russian Federation. Minimum expenses for transporting main raw materials - bischofite solution and caustic soda (by pipeline). ￜ FURTHER DEVELOPMENT POTENTIAL. Further diversification of the complex is possible with introducing the stage of isolating bromine from bischofite solution fed for magnesium hydroxide production and further synthesis of bromine compounds with high added value, for e.g. sodium bromide. ADVANTAGES OF THE PROJECT 4 JSC "NIKOMAG" 400097, Volgograd, str. 40 let VLKSM, 57, tel.: +7 (8442) 406990, fax: +7 (8442) 406010, e-mail: market@kaustik.ru JSC "NIKOMAG" STRATEGIC DEVELOPMENT PLAN JSC “NIKOMAG” ABOUT THE PROJECT

5. NANOSTRUCTURED MAGNESIUM HYDROXIDE 5 Index Denomination Norm Value Grade AGrade BGrade M7Grade M10 Appearance White powder White paste White powder White powder Mass fraction of magnesium hydroxide, %, minimum99.050.097.0 Mass fraction of volatile substances at 105  С, %, maximum0.350.00.3 Iron fraction of total mass calculated on ferric oxide (Fe2O3), %, maximum0.010.020.01 Calcium chloride fraction of total mass calculated on calcium hydroxide (CaO), %, maximum 0.150.080.20 Chlorides fraction of total mass, %, maximum0.100.050.10 Silicon dioxide (SiO2) fraction of total mass, %, maximum0.05―0.080.10 Sulfates fraction of total mass, %, maximum0.10―0.20― Aluminum fraction of total mass calculated on aluminum oxide (Al2O3), %, maximum0.05―0.10― Mass fraction of loss on ignition at temperature 1000  С, %30.0-33.0― Bulk density, g/cm3, minimum0.40―0.30 Weight of oil adsorbed by magnesium hydroxide, g, maximum60.0―40.050.0 Specific surface, m2/g――5.0-8.08.0-15.0 Particle-size distribution: diameter of 10 % of particles (d10), maximum diameter of 50 % of particles (d50), maximum diameter of 90 % of particles (d90), maximum 0.70 1.65 4.10 ―――――― 0.70 1.65 4.10 0.70 1.65 4.10 NANOSTRUCTURED MAGNESIUM HYDROXIDE IS USED: Ιas a highly effective non-toxic inorganic flame retardant, filler and smoke suppressant additive for producing practically all kinds of plastics and pigmented (co)polymer compounds based on PVC, PA, PS, PP, PE, PET etc.; Ιin paper and cardboard production; Ιas a mild neutralizing agent for water treatment; Ιas a raw material in the pharmaceutical branch. MAIN QUALITY FACTORS: MAGNESIUM HYDROXIDE JSC "NIKOMAG" 400097, Volgograd, str. 40 let VLKSM, 57, tel.: +7 (8442) 406990, fax: +7 (8442) 406010, e-mail: market@kaustik.ru JSC "NIKOMAG" STRATEGIC DEVELOPMENT PLAN JSC “NIKOMAG”

6. High producibility of both magnesium hydroxide itself and polymer compounds based on it associated with passing one the geometrical dimensions (flake height) to the category of nanosizes conditions a fundamental change in nanostructured magnesium hydroxide properties and its easier and completer distribution in the mass of polymer matrix. Polymer compounds produced using nanostructured magnesium hydroxide with modified surface have been tested together with Russian leading manufacturers and specialized institutes, such as Federal State Unitary Enterprise Fire Safety Research Institute. The full set of certification tests has bee carried out. Feedback received from the end users allows us to state with certainty the doubtless technical and technological advantages of nanostructured magnesium hydroxide compared to the analogs availabe in the market. As a result, as early as the design stage, NIKOCHEM concluded a number of off-take contracts for delivering nanostructured magnesium hydroxide. CONFIRMED PRODUCIBILITY AND EFFECTIVENESS 6 APPLICATION ADVANTAGES: COMPARED TO THE NATURAL ANALOG - BRUCITE COMPARED TO ALUMINUM TRIHYDRATE COMPARED TO THE SUBMICRON ANALOG regular crystalline structure, chemical purity, particle-size distribution constancy ensure stability of the indices of the produced compounds and their processing conditions; extruder motor load decrease to 30%: increasing the thermostability polymer compounds, possibility of producing white compounds and finished products; increasing the rate of processing the compounds to 40% and their plasticity. decreasing the thermal degradation of plastics due to higher heat absorption in the process of decomposition (to 328 kcal/g), a higher temperature range of thermal degradation (330- 450 ° C in case of magnesium hydroxide compared to 220 ° C in case of aluminum hydroxide), much higher qualitative characteristics: whiteness, abrasivity and controlled dispersion. better processability (electric energy saving while processing); higher electrical resistance (it is more efficient in insulating materials production); higher fire resistance of compounds and finished products, their higher level of safety for people and lower environmental impact at combustion. JSC "NIKOMAG" 400097, Volgograd, str. 40 let VLKSM, 57, tel.: +7 (8442) 406990, fax: +7 (8442) 406010, e-mail: market@kaustik.ru JSC "NIKOMAG" STRATEGIC DEVELOPMENT PLAN JSC “NIKOMAG” MAGNESIUM HYDROXIDE

7. CONFIRMED PRODUCIBILITY AND EFFECTIVENESS 7 COMPARING THE PROPERTIES OF THE MAIN FLAME RETARDANTS Index DenominationsMagnesium hydroxideAluminum TrihydrateBromine-Containing Decomposition temperature, 0С340-380180up to 400 Smoke density decrease at combustion3-9 times2-5 timessmoke density increases Electric conductivity (10% in Н2О),  S/cm  350  200not rated Heat absorption at decomposition12201075none Whiteness (Elrepho 357 nm)>96>94not rated Smoke toxicity at decompositiondoes not form toxic or pungent gasesbromine-containing toxic gases Consumption rate, %up to 40up to 50up to 10 Finished product recycling technology level, %90-10050-6010-20 The given consumption rate values of various flame retardant types characterize to a greater extent maximum values for the most popular compounds and will vary in rather wide range for particular formulations, depending on the required fire resistance and other characteristics. JSC "NIKOMAG" 400097, Volgograd, str. 40 let VLKSM, 57, tel.: +7 (8442) 406990, fax: +7 (8442) 406010, e-mail: market@kaustik.ru JSC "NIKOMAG" STRATEGIC DEVELOPMENT PLAN JSC “NIKOMAG” MAGNESIUM HYDROXIDE

8. High-purity magnesium hydroxide is mainly used an effective environment-friendly flame retardant filler in the manufacturing of polymer compounds and finished products. At the present time, a fundamental change in flame retardant market structure is observed. The main trend is step-by-step halogen flame retardant abandonment in favor of halogen-free ones. This process is tooke place in conformity with EU Regulation on halogen flame retardant use restriction coming into effect in 2013. First of all, it relates to the low ecological and toxic safety level of halogen flame retardants, which, in its turn, determines high and constantly growing demand for halogen-free flame retardants in general and magnesium hydroxide in particular. After passing the Federal Law of the Russian Federation of July 22, 2008 Nr. 123-ФЗ "Technical regulations for fire safety requirements" requirements to fire safety of polymer compounds are toughening significantly in Russia. As the result, polymer compounds produced using imported submicron magnesium hydroxide available in the market do not meet the requirements of the Law in respect of many indices. In case of adding same flame retardant amounts, polymer compound containing nanostructured magnesium hydroxide has a number of advantages compared to analogs including submicron magnesium hydroxide available in the market: Ιbetter processability (electric energy saving while processing); Ιhigher electrical resistance (it is more efficient in insulating materials production); Ιlower combustibility and higher level of ecological safety at combustion. DEMAND IN THE MARKET 8 JSC "NIKOMAG" 400097, Volgograd, str. 40 let VLKSM, 57, tel.: +7 (8442) 406990, fax: +7 (8442) 406010, e-mail: market@kaustik.ru JSC "NIKOMAG" STRATEGIC DEVELOPMENT PLAN JSC “NIKOMAG” MAGNESIUM HYDROXIDE

9. ￜThe target segment of the world market is the market of EU countries and the reasons for this are logistical considerations and its price attractiveness (compared with other regions of active demand). ￜThe present magnesium hydroxide market volume in European Union countries is assessed to be at the level of 30 tons/year with further growth potential. ￜAccording to the pessimistic forecast, 5% growth of magnesium hydroxide market is expected in the medium term; the optimistic forecast is 9-10%. The main growth segments are power supply cables with projected growth approximately 5-8%, as well as cables and wires for automobile use with growth within 4-11%. ￜRussian magnesium hydroxide market potential is approximately 9 thousand tons. The main regions of demand concentration in the domestic market are: Samara, Sterlitamak, Dzerzhinsk, Vladimir, Volgograd, Moscow. The main direction is the European part of the Russian Federation, because the most consumers are situated in this part. ￜThe markets of CIS countries also have some demand potential: ￜUkraine - up to 3 000 t; ￜBelarus - up to 150 t; ￜKazakhstan - up to 500 t. DEMAND IN THE MARKET 9 JSC "NIKOMAG" 400097, Volgograd, str. 40 let VLKSM, 57, tel.: +7 (8442) 406990, fax: +7 (8442) 406010, e-mail: market@kaustik.ru JSC "NIKOMAG" STRATEGIC DEVELOPMENT PLAN JSC “NIKOMAG” MAGNESIUM HYDROXIDE

10. SYNTHETIC MAGNESIUM OXIDE 10 SYNTHETIC MAGNESIUM OXIDE IS USED: Ιin transformer steel production to form the insulating layer; Ιas a vulcanizing agent in rubber production; Ιas a filler in the production of rubber, plastics, mastic compounds, adhesive materials; Ιin medicine and perfumery; Ιin chemical agent production; Ιin crude oil and petroleum product removal; Ιin producing various magnesium compounds; Ιin gas purification; Ιin leatherware production (leather dressing); Ιas a component of drilling muds. MAIN QUALITY INDEXES: Index Norm value grade A (chemicals) grade Б transformer steel grade B (general mechanical rubber goods, plastics) Mass fraction of magnesium oxide (MgO), %, min99 Mass fraction of calcium oxide (CaO), %, max0,350,30 Mass fraction of silicon dioxide SiO 2, %, max0,05- Mass fraction of iron oxide Fe 2 O 3, %, max0,05- Mass fraction of aluminum oxide Al 2 O 3, %, max--0,05 Mass fraction of chloride ion Сl -, %, max0,100,030,10 Mass fraction of sulfate ions SО 4 2-, %, max0,20 0,15 Mass fraction of sodium ion (Na + ) and potassium ion (К + ), %, max0,1- Loss of ignition, %, max0,8-2,02,0-4,04,0-10,0 Specific surface area (BET), m 2 /g, within4-20-40-170 Citric acid reactivity, seconds, within-60-80- Particle size: passes 325 mesh (wet screening), %, min99,099,599,9 JSC "NIKOMAG" 400097, Volgograd, str. 40 let VLKSM, 57, tel.: +7 (8442) 406990, fax: +7 (8442) 406010, e-mail: market@kaustik.ru JSC "NIKOMAG" STRATEGIC DEVELOPMENT PLAN JSC “NIKOMAG” MAGNESIUM OXIDE

11. The world demand for the magnesium oxide of high-purity is focused on the following main applications: Ιfood and pharmaceutical industry; Ιproduction of lubricating oil additives; Ιgeneral mechanical rubber goods production; Ιchemical compounds production; Ιtransformer steel production. According to the data in the report by «SRI Consulting» the consumption growth up to 2.5% per year is projected in the main markets of magnesium oxide (CCM) – the USA and EU during 2012-2016. The main prospects of synthetic magnesium oxide demand growth are conditioned by consumption increase in the segments of general mechanical rubber goods and transformer steels at the level of as much as 4% by 2016: Ι-in general mechanical rubber goods production due to predictable structural change from simple general mechanical rubber goods to more sophisticated ones - vulcanized with some elements (metal, plastic etc.), mechanical engineering development: Ι-in transformer steel production due to the trend of modernization and building new production facilities with cluster arrangement manner and to general electric power consumption growth and the corresponding transformer infrastructure revamping. DEMAND IN THE MARKET 11 JSC "NIKOMAG" 400097, Volgograd, str. 40 let VLKSM, 57, tel.: +7 (8442) 406990, fax: +7 (8442) 406010, e-mail: market@kaustik.ru JSC "NIKOMAG" STRATEGIC DEVELOPMENT PLAN JSC “NIKOMAG” MAGNESIUM OXIDE

12. FLAKED MAGNESIUM CHLORIDE 12 MAGNESIUM CHLORIDE IS USED: Ιas an independent deicing agent and as part of modern multicomponent icemelters; Ιfor handling of dust-forming and freezable cargoes in mining and metal industry; Ιin oil and gas industry as a component of magnesia cement mortars; Ιin building industry: in production of magnesia concretes, glass-magnesium sheet, foam magnesium carbonate etc. Ιin chemical industry: preparation of magnesium-containing compounds, production of synthetic rubbers and thiokol; Ιin textile industry; Ιin production of fire-proof and abrasive materials. MAIN QUALITY INDEXES: INDEX NAMEVALUE Mass fraction of magnesium ions (Mg 2+ ), %, not less than11,8 Mass fraction of magnesium ions (Mg 2+ ), % calculated as MgCl 2 * 6H 2 O, %, not less than97 Mass fraction of calcium chloride calculated as calcium oxide (CaО),%, not more than0,1 Mass fraction of sulfates calculated as sulfate ion, %, not more than0,1 Mass fraction of alkali metals ions (Na + + K + ), %, not more than0,8 Mass fraction of water-insoluble residue, %, not more than0,2 JSC "NIKOMAG" 400097, Volgograd, str. 40 let VLKSM, 57, tel.: +7 (8442) 406990, fax: +7 (8442) 406010, e-mail: market@kaustik.ru JSC "NIKOMAG" STRATEGIC DEVELOPMENT PLAN JSC “NIKOMAG” MAGNESIUM CHLORIDE

13. The Russian magnesium market volume has been growing during last five years. In 2007 the market was assessed at 5500 tons, in 2010 - 13300 tons, at year-end 2012 it reached 25800 tons which is equivalent to the annual average growth of consumption by more than 60%. In 2014 the market has grown by 23% to a greater extent due to the consumption expansion of the following segments: ￜ handling of freezable cargo (up to 9000 t); ￜ oil and gas industry (up to 7600 t). The most prospective applications of bischofite (magnesium chloride) are anti-icing industry, oil and gas industry and application as an antifreeze compound for bulk cargo in metal industry and mining industry and the total prospective volume of 50000 tons per year. In the short term the projected consumption growth of magnesium chloride is not less than 20% per year considering the existing potential of the magnesium chloride application and the lack of the plans concerning the commissioning of new capacities by Russian manufacturers (except for CJSC “NIKOMAG”) and if there are some free volumes it will be at the level of the really reached ones over a period of 2007-2012 - not less than 40% per year. DEMAND IN THE MARKET 13 MAGNESIUM CHLORIDE JSC "NIKOMAG" 400097, Volgograd, str. 40 let VLKSM, 57, tel.: +7 (8442) 406990, fax: +7 (8442) 406010, e-mail: market@kaustik.ru JSC "NIKOMAG" STRATEGIC DEVELOPMENT PLAN JSC “NIKOMAG”

14. INVESTMENTS IN COMPANY DEVELOPMENT 14 INVESTMENTS IN COMPANY DEVELOPMENTTOTAL TOTAL INVESTMENTS:128.7 1. Own funds46.7 2. Contribution of RUSNANO to equity NIKOMAG16.2 3. Loan by RUSNANO24.9 4. Bank loan by Sberbank40.9 For recalculating the future payments the exchange rate of 01.10.2014 - RUB 40/$ is accepted Million USD JSC "NIKOMAG" 400097, Volgograd, str. 40 let VLKSM, 57, tel.: +7 (8442) 406990, fax: +7 (8442) 406010, e-mail: market@kaustik.ru JSC "NIKOMAG" STRATEGIC DEVELOPMENT PLAN JSC “NIKOMAG” NIKOMAG

15. PROJECT PARAMETERS: When the project is implemented, CJSC “NIKOMAG” will be in the top three of the largest manufacturers of magnesium oxide and magnesium hydroxide high-purity grades along with such companies as “ICL” (Israel) and “KOYOWA” (Japan) which are market leaders in these goods. FUTURE PROSPECTS OF THE COMPANY 15 INDICATORS, USD MILLIONS2014 WHEN REACHING THE DESIGN CAPACITY REVENUE12,72127,5 NET INCOME1,9832,4 EBITDA4,1350,6 AVERAGE STAFF NUMBER, PERS.60290 PB6.9 years DPB8.4 years NPV22.9 mio $. IRR18,25 % JSC "NIKOMAG" 400097, Volgograd, str. 40 let VLKSM, 57, tel.: +7 (8442) 406990, fax: +7 (8442) 406010, e-mail: market@kaustik.ru JSC "NIKOMAG" STRATEGIC DEVELOPMENT PLAN JSC “NIKOMAG” NIKOMAG

16. CONTACT INFORMATION 16 ΙLLC “NIKOCHEM” Ι400097 Volgograd, 40 Let VLKSM Street, 57 Ιtel.: +7 (8442) 40 69 90 Ιfax: +7 (8442) 40 60 10 Ιhttp: www.nikochem.com Ιe-mail: info@nikochem.com ΙCJSC “NIKOMAG” Ι400097 Volgograd, 40 Let VLKSM Street, 57 Ιtel.: +7 (8442) 40 69 92 Ιfax: +7 (8442) 40 60 10 Ιhttp: www.nikomag.com Ιe-mail: market@kaustik.ru CONTACTS JSC "NIKOMAG" 400097, Volgograd, str. 40 let VLKSM, 57, tel.: +7 (8442) 406990, fax: +7 (8442) 406010, e-mail: market@kaustik.ru JSC "NIKOMAG" STRATEGIC DEVELOPMENT PLAN JSC “NIKOMAG”