Management Report on Company Business
Activities and Assets

PRODUCTION

The Company extracted a total of 23.1 million tons of coal (the second largest amount in its history) and 98.3 million m³ of overburden. In addition to coal and overburden, the Company extracted 121,496 tons of kaolin and 4,368 tons of oxyhumolites.

Doly Nástup Tušimice

Doly Nástup Tušimice extracted 13.7 million tons of coal, down 0.3 million tons from 2000. 99.3% of DNT's production was supplied to ČEZ. Overburden extraction totalled 47.7 million m³,
or 0.2 million m³ less than in 2000.

Libouš – West Quarry, North Quarry

The North Quarry, in operation since 1997, is located in the western portion of Libouš – East Quarry and follows up on advances from 1988 – 1992. The quarry is at the edge of the mining area where the coal seam runs deep. Until 2016 it will advance via overburden and coal sections in a southward direction towards Libouš Quarry, eliminating the danger of instability in the closing banks.

Libouš – East Quarry

The quarry is advancing in a northerly direction towards the border of the mining area near the town of Černovice. The town is protected from the mining operation by huge earth embankments.The border of the mining area will be reached by the overburden section in 2006 and by the coal quarry in 2016. Libouš – West and Libouš – West Quarries run extraction programmes in accordance with approved project documentation and the resulting Plan of Development, Preparation, and Extraction approved under mining authorization from the Most District Mining Authority of 4 December 1998.

Libouš II – South Quarry

This is a prospective locality. In view of declining demand, the opening of the Libouš II - South Quarry has been postponed. Overburden extraction at the quarry is now set to begin in 2006 with coal extraction to follow between 2007 and 2011.

Libouš II – North Quarry

After Libouš – East is mined out in the westerly and easterly directions, overburden (from 2006) and coal (from 2017) extraction will continue in the last part of the mining area in the newly opened quarry Libouš II – North. Before the new quarry can be developed, it will be necessary to complete the rerouting of a section of the Chomutov-Březno railway line in order to take it out of the mining area; this stretch of re-laid track should enter into operation in 2004.
The quarry in the current mining area, compliant with the ecological limits imposed by Government Resolution No.444/1991, will be shut down in 2035 – 2040.

Overburden Disposal

Extracted overburden materials are disposed of by back-filling into mined-out areas. The largest back-fill operation currently ongoing is in the former Merkur Quarry, using overburden spoil benches to ensure the stability of built-up areas at the foot of the Krušné hory mountain range.

Technologies Used

Overburden is extracted using KU 800 and SRs 1500 excavators of the TC₂ range. Overburden is transported by 1,800 mm gauge conveyor belt and deposited in spoil benches adjacent to the ZP 5500, 6600, and ZPDH spreaders of the same series. In the coal quarry, we use KU 300s and K 800 excavators of the TC₁ range. Coal is extracted by 1,200 mm gauge conveyor belt and transported by 1,600 and 1,800 mm conveyor belt (the latter a new corridor put into operation in October 2001) to the Tušimice II Power Station or to a loading facility for the power stations Prunéřov I, Prunéřov II, and Chvaletice.
An unprecedented feat last year was the performance by our KU 800.8/77 excavator on the third overburden section of the Libouš- East Quarry, which broke the existing record in the Czech Republic for surface extraction by extracting 11,637,123 m³ of overburden. A homogenization depot, through which most extracted coal passes, ensures consistent quality of coal extracted for supply to ČEZ power stations.

Estimate of Economically Usable Stocks of Doly Nástup Tušimice

At the end of 2001, 334 million tons of usable stocks were available in the Tušimice mining area as set by the Most District Mining Authority on 9 August 1994.

Doly Bílina

Doly Bílina (DB) extracted 9.4 million tons of coal, or 0.5 million tons more than in 2000. This is the highest ever extraction in the modern history of the Company. Record monthly, daily, and shift performances were registered during the year. The overburden extraction volume of 50.6 million m³ is comparable with the year previous.
In the years to come, mining activity at Doly Bílina will continue at three sites: the quarry itself and the Radovesice and Pokrok overburden dumping areas. The Company is taking the necessary technical and technological action at the Radovesice dumping area for the preceding termination of mining activities. The mining front is advancing in a parallel westerly direction.

Bílina Quarry

At an estimated annual coal extraction volume of 8.0 – 8.5 million tons, the mining operation in its current spatial figuration given by environmental protection restrictions under Government Resolution No.444 from 1991 will be shut down sometime around 2030. Under Decision of the Most District Mining Authority 3636/95 of 18 December 1995, the mining operations of Doly Bílina are permitted in accordance with the approved Plan of Development, Preparation, and Extraction for the period up to 2005, or until such time as the permitted limits are reached.

Overburden Disposal

The bulk of extracted overburden is disposed by back-filling into mined-out areas. Only overburden from the first and second overburden sections is disposed of at the Radovesice and Pokrok dumping areas. The operations of the Radovesice and Pokrok dumping areas will be phased out by 2003 and 2010 respectively. All overburden will then be deposited in the mined-out areas of the Bílina Quarry.

Ledvice Coal Preparation Facility

Coal processing at DB's preparation facility in Ledvice produced 8.8 million tons of coal sorted in accordance with customer requirements, including coal with additives. The year-on-year rise in production was 0.5 million tons, a new record for the facility.

Technologies Used

Overburden at DB is extracted using a TC₃ technological configuration consisting of a K 10000 excavator, 2,200 mm gauge trunk conveyor, and ZP 10000 belt spreader, as well as a TC₂ composed of four KU 800 and one K 2000 excavators, 1,600 mm, 1,800 mm, 2,000 mm, and 2,200 mm gauge belt conveyors. The overburden excavated by the TC₂ excavators is disposed of the A2RsB 8800, ZPD 8000, and ZP 5500 spreaders and two spreaders of the ZP 6600 type.
The technology of the coal quarry comprises TC₁ excavators of the KU 300/S type, and a K 650 excavator. Non-coal materials from the quarry are transported by 1,200 mm and 1,600 mm gauge belt conveyors to ZP 2500 and ZP 3500 spreaders for back- filling into mined-out areas. A total of six TC₁ excavators were used at the coal quarry, of which five were KU 300/S and one was aK650. Coal is transported by two 1,200 mm and 1,600 mm conveyor belts from the south portion of the quarry and by two 1,200 mm conveyor belts from the north area of the quarry to the underground hoppers of the Ledvice Coal Preparation Facility.

Estimate of Economically Usable Stocks of Doly Bílina

At the end of 2001, 257 million tons of usable stocks were available in the Bílina mining area as set by the Most District Mining Authority on 4 September 1996.

Quality Management

Both mines operate homogenization depots of extracted coal, which are equipped with stockyard machinery. These transfer points allow the mines to respond flexibly to current developments in sales. The Company pays maximum attention to the quality of charge coal during extraction. The Company’s top-class control centre monitors sulphur and ash content non-stop. Other parameters, such as water content, calorific value, combustion heat, etc., are assessed in the coal laboratory. The final products are therefore assured of the required standard quality.
Extracted oxyhumolites are mainly processed into sodium and potash humic acid salts sold under the brand names 'Ořechové mořidlo (Nut Stain) and Dralig. Their quality is attested by an ISO 9002 certificate.

Authorization to Operate Mining Activities

The Company’s mining authorization was granted under number 1904/99 of 15 June 1999 and number 1910/99 of 17 June 1999. The main terms and conditions relating to the mining and economical use of mineral deposits are laid down by Act No.44/1988 Sb, on the Protection and Use of Mineral Resources (the Mining Act), and by Act No.61/1988 Sb, on Mining, Explosives, and State Mining Management. The District Mining Authority in Most is charged with inspecting observance of these conditions. In accordance with the Mining Act (No.44/1988 Sb), the Company creates legal reserves for the cleanup, reclamation, and mining damage in order to eliminate the consequences of mining operations and remove damage associated with extraction activities. Under this Act, the Company also makes contributions from mining area and extracted mineral proceeds. Mining at individual mining localities is carried out in an area restricted by ecological limits set under Government Resolution No. 444 of 1991. The Company’s mining activities are also affected by Act No.244/1992 Sb, on the Assessment of Impacts of Development Plans and Environmental Programmes.