Opportunities for Investment in the Kosovo Mining Sector

– US-Kosovo Investment Forum –

Republika e KosovësRepublika Kosova-Republic of Kosovo

Qeveria - Vlada - Government

MINISTRIA E ENERGJISË DHE MINIERAVEMINISTARSTVO ENERGIJE I RUDARSTVA

MINISTRY OF ENERGY AND MININGM I N I S T E R

Presented by Faik Nahi

New York, 27 October 2010

I. Mineral resources of Kosovo

II. Mining sector strategic objectives

III. Procedures for obtaining licenses

IV. Required investment

V. Way forward

MINISTRIA E ENERGJISË DHE MINIERAVEMINISTARSTVO ENERGIJE I RUDARSTVA

MINISTRY OF ENERGY AND MINING

CONTENTS ON MINING SECTOR

I. Mineral resources of Kosovo

Kosovo is remarkably rich with metallogenic endowment which has supported a long mining history.

These mineable reserves have enabled mining exploitation of lignite, lead zinc silver, nickel, chrome, bauxite, magnesium and a wide variety of construction materials.

MINISTRIA E ENERGJISË DHE MINIERAVEMINISTARSTVO ENERGIJE I RUDARSTVA

MINISTRY OF ENERGY AND MINING

I. Mineral resources of Kosovo – cont’d

Major minerals of Kosovo are:

LigniteKosovo hosts probably the best Lignite reservesIn Europe with relatively low sulphur, low moistureand high calorific value for such deposits. With estimated geological reserves of greater than14 billion t, Kosovo is well placed to be a major European power producer.

Lead ZincThe Trepca Lead Zinc Silver district is world class. To give investors some indication of its magnitude, the Trepca mining complex employed more than 23,000 staff in the 1980’s. Much exploration is still required and these mines will be seeking private investment in the near future.

FerronickelThe three lateritic mines and the smelter complex of Ferronikeli were privatized in 2006. There are several indications of further nickel deposits whichshow significant potential.

MagnesiteThe two previously operational magnesite minesin Kosovo were privatised in 2007. There are additional indications of significance concerning magnesite.

CopperWith such a significant Lead Zinc Silver district in play, and many copper/gold indications, the exploration potential for finding a significant copper deposit is high. A major US copper producer has already undertaken a serious exploration program in a small concession area.

Gold and SilverGold, Platinum and Rare Metals such as: Indium. Selenium, Telur, Wolfram and Vanadium are often present in the Lead Zinc Silver ore bodies in significant quantities. Fore example, by year 2000 some 5,528 t of Silver and 11,980 kg of Gold have been exploited as by products from Trepca mines.

ChromeChrome has been mined in modest underground mining operations along a large weathered serpentenite trend. Deva Chrome previously concentrated and exported ore to Albania. There is clearly excellent exploration potential.

BauxiteThe Bauxite mines found near Klina in Kosovohave been dynamic bauxite producers. The ore was exported to smelters in Romania in thepast. These mines are slated for privatization in 2009.

MINISTRIA E ENERGJISË DHE MINIERAVEMINISTARSTVO ENERGIJE I RUDARSTVA

MINISTRY OF ENERGY AND MINING

• Reform & restructure the mining sector according to the European approach in order to enable its development mainly through private investments

• Alleviate inherited social issues and address environmental concerns

II. Mining sector strategic objectivesMINISTRIA E ENERGJISË DHE MINIERAVE

MINISTARSTVO ENERGIJE I RUDARSTVAMINISTRY OF ENERGY AND MINING

There exist three ways obtaining an exploration/exploitation license in Kosovo:

a) First come, First served

b) Competitive Tendering (as described in the Law of Mining and Minerals)

c) Mine Development Agreement

Ministry of Energy and Mining, has identified nine (9) areas or “Zones of Interest” that intends to launch for a competitive tendering / licensing process.

Announcements will be published in the Mining Journal.

III. Procedures for obtaining licensesMINISTRIA E ENERGJISË DHE MINIERAVE

MINISTARSTVO ENERGIJE I RUDARSTVAMINISTRY OF ENERGY AND MINING

IV. Required investment

Major private investment opportunities include:

1. Development of Trepça profitable business potentials

2. Development of nickel, chromium, copper, magnesite, bauxite, etc.

3. Development of lignite resources, apart from the Sibovc Mine

4. Development of rare and industrial minerals

MINISTRIA E ENERGJISË DHE MINIERAVEMINISTARSTVO ENERGIJE I RUDARSTVA

MINISTRY OF ENERGY AND MINING

1. Completion of reform and restructuring process

2. Enhancing the regulatory framework

3. Preparation of processes required for conducting open and transparent tendering

4. Establishing win-win’ public private partnerships

5. Promote serious private investment, particularly from the USA, UK, Canada and other developed countries, including investments from Kosovo investors

V. Way forwardMINISTRIA E ENERGJISË DHE MINIERAVEMINISTARSTVO ENERGIJE I RUDARSTVA

MINISTRY OF ENERGY AND MINING

MINISTRIA E ENERGJISË DHE MINIERAVEMINISTARSTVO ENERGIJE I RUDARSTVA

MINISTRY OF ENERGY AND MINING

Thank You !