RYAN’S NOTES CONFERENCE

2. RYAN’S NOTES CONFERENCE TUCSON 2008

3. ELECTRICITY

4. QUARTZ

5. WOOD CHIPS

6. COAL

7. STEEL SCRAP / IRON ORE

9. 2001 US IMPORTS OF FESI MT 0.142 millions

10. 2007 US IMPORTS OF FESI

11. 2008 US IMPORTS OF FESIBASED OFF IMPORTS FOR THE FIRST 5 MONTHS

12. 2008 IMPORTS OF FESI INTO N. AMERICA: Jan-May 2008

13. CHINESE MARKET SHARE OF FESI into NORTH AMERICA

14. Crude Steel Production

15. USA Imports Volume/Share Trend

16. China FeSi Production vs. Exports

17. FeSi 75% Main Exporters

18. In Terms of Ferrosilicon….. China is the “Big Daddy”!

19. 2007 CHINA COSTS25% Export Duty Added CHINA

20. CHINA… • PRODUCTION:Approx 4.5 million tons annual total production by the end of 2007 • LOCATIONS:Mongolia, Ningxia, Gansu, Sichuan, Guizhou, Shanxi • PRODUCERS:Over 1,000 FESI producers • CAPACITY:Only 3 Chinese FeSi producers with annual • capacity of approximately 100,000MT • GOVERNMENT:Pressured smaller-furnace ferroalloy producers to close for environmental/energy reasons • 2005: Erdos

21. Erdos • Producing…. • Ferrosilicon – 550,000 MT • Silicomanganese - 150,000 MT • Silicon Metal – 30,000 MT • Silicon Carbide – 10,000 MT • Approximately 50% of production is exported • Main production is at the ERDOS Industrial Park in Qipanjing • Furnaces - 37 (22-25 MVA) and 15 (15-12.5 MVA) • Power - Capacity of approximately 1060 MW, supported by 7,000,000 T/Y of coal from 6 coal mines • MEDIMAis a North American agent for Erdos • Importing approximately 36,000 MT of their FeSi per year • (The next biggest producers are Ningxia and Northwest , at approximately 100, 000 MT)

27. 2009 Projections: Short term….. WEAKENING FERROSILICON TREND TO CONTINUE! During 2008, we have seen a 100 year high in the price of Ferrosilicon. Unfortunately, the ferroalloys all move in-sync! The recent weakness in commodity pricing will be reflected in FeSi as well.

31. Statistical Summary • One particular commodity can not buck the trend unless there are highly unusual circumstances, such as explosions, government duties etc. • The market is weakening! In this phase of the market - cost becomes less of a factor in determining the price • The major important factor here is … • “What is the market price?” • Supply and demand set this price • The choice of whether to sell or not is made by each individual producer • As the price comes down, cost will become more important. But we believe we have a way to go on this!

32. Factors That Will Determine 2009 FeSi Price • Over 65% of world production of FESI Production occurs in China • China and Russia are the dominant importers into North America • Negative Factors • SCENARIO: Global economic slowdown leads to drop in demand for FeSi and potentially a drop in Chinese export duties. • SCENARIO: Economic slowdown in China slows steel production in China and unleashes a flood of FeSi into the world market. • Fact • China has dumping duties into EU. • They have to go somewhere and therefore, North America becomes more important ! • Positive Factors • SCENARIO:Energy costs continue to escalate. • SCENARIO:Chinese authorities increase export duties.

33. Consider….. • Chinese domestic FESI market dwarfs rest of the world • Chinese consume over 2 million tons FeSi per year • In comparison, North America (including domestic production) is approximately 400,000 MT and any overflow from a slowing China would have enormous negative consequences on the price • With over 90% market share in Asia, Chinese have no where else to go in the event of a slowdown • Consequently - no new “greenfield sites” or substantial production increases in the West