OKD

OKD’s hard coal reserves are situated in the Karviná and Ostrava regions of the Upper Silesian coal basin, covering a total area of approximately 120 sq km.

There are four active OKD hard coal mines: Karviná, Darkov, Paskov and ČSM. Reserves in these active mines total 228 million tonnes. Production, reserves and coal types are as follows:

OKD

Dębieńsko

In June 2008 we were granted a 50-year licence to mine coal in Dębieńsko, southern Poland. The project holds approximately 190 million tonnes of reserves, the majority of which are coking coal. Our Polish subsidiary KARBONIA PL, began drilling holes to establish shaft conditions of the area in November 2008.

The granting of the Dębieńsko licence was a milestone in our strategy to increase long-term production and add to our reserves through regional expansion and organic growth. The project is located near our existing operations in southern Poland, 40 km from the Czech border, and the geological conditions are very similar to that of our current operations.

A full feasibility study is currently under way and should be completed during the first half of 2009.

Morcinek

Morcinek is located in the Upper Silesian coal basin in southern Poland, near the border with the Czech Republic. Mining activities in the area were previously performed by various companies, the last being Jastrzebska Spolka Weglova S.A. (“JSW”). JSW terminated production in the late 1990s.

We initiated the project in 2002. The initial intention was to access the coal in the southern part of this mining district using the infrastructure from our nearby ČSM mine. We have since acquired the relevant documentation and exploration concessions allowing us to prepare a conceptual study as well as a licence to extract coal bed methane from the area.

In October 2007, we signed a letter of intent with JSW, which outlined the objectives of both parties and key milestones of the project.

The cross-border mining activities are to be regulated by an agreement, which was signed on 20 August 2008 by both the Czech and Polish governments. We believe the partnership will be mutually beneficial.

Frenštát

Frenštát is located 30 km south of Ostrava. The resource was identified and preliminary drilling began in the 1980s. However, development was put on hold in the late 1980s.

We have the sole right to develop the mine. We are currently evaluating the economic feasibility of developing the resources, taking into account factors such as the quantity and quality of resources at Frenštát, the length of time required to develop these resources, and our ability to obtain any relevant permits and to work constructively with local and governmental authorities.

Frenštát is not an operational mine and the development of Frenštát into an operational mine will require mining and environmental permits, approvals from and agreements with municipal authorities and significant capital expenditures.

Coal reserves according to JORC* (million tonnes)

Mine			Total
Karviná			101
Darkov			47
Paskov			27
ČSM			53
Dębieńsko			190
Total			418
Source: The Company * The reserve estimates provided in this annual report are an indicative equivalent to the JORC Code.

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