OM Sarawak Successfully Completes EPC Contract

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Leveraging on the economic opportunities in SCORE

Kuching (Sarawak), Monday, 8 April 2013. OM Materials (Sarawak) Sdn Bhd (“OM Sarawak”) is pleased to announce today that it has successfully executed the lump-sum turnkey Engineering, Procurement and Construction (“EPC”) contract for the Ferro Alloy Smelting Project in Samalaju, Sarawak, Malaysia (“Project”). OM Sarawak is a joint venture company in which Cahya Mata Sarawak Berhad (CMSB – 2852) has a 20% equity interest through its wholly owned subsidiary, Samalaju Industries Sdn Bhd (“SISB”), and in which ASX listed OM Holdings Limited (ASX:OMH) has an 80% equity interest.

The EPC contract was signed with Sinohydro Corporation Limited and Sinohydro Corporation (M) Sdn Bhd (collectively “Sinohydro”) and Sinosteel Jilin Electro-Mechanical Equipment Co. Ltd (“Sinosteel Jilin”) as a nominated sub-contractor, for the construction and commissioning of Project. The signing of the EPC contract completes the final stage in the Project’s planning and preparation process, paving the way for a full scale Project construction phase to commence immediately.

The Project represents a significant milestone for CMSB and OMH to proceed with its expansion plans and to ride on the economic potential of Sarawak’s growth story driven by the availability of hydro power. The Project is poised to be a key catalyst for CMSB and OMH’s earnings going forward.

Sinohydro participated in the construction of the Bakun hydroelectric project in Sarawak and its current contracts include the construction of the Murum Hydroelectric Project which is worth approximately USD1.3 billion in Sarawak and the Hulu Terengganu Hydroelectric Project estimated at USD276 million in Peninsular Malaysia.

Sinosteel Jilin is one of China’s leading designer, manufacturer and installer of submerged electric arc furnaces, furnace automation, control systems and furnace transformers.

OMH’s Executive Chairman, Low Ngee Tong, commented, “The successful completion of the key components of our project preparation, being the power contract, environmental approval, project financing and now the EPC contract, leading to the commencement of full-scale project construction, signify a very important milestone not only for OMH and OM Sarawak, but also for the global steel and alloy industries and the Samalaju industrial development project.” He further added, “10 years ago OMH embarked on a ferro alloy smelting project in Qinzhou, China. Standing in the middle of a small fishing village at the time we envisioned a future port and smelting hub with close proximity to power, imported and domestic raw materials and customers. Today, Qinzhou is the world’s largest manganese import port and a major global

alloy smelting hub and OM Qinzhou developed into a world-class smelting and sintering facility serving the domestic market. We see the same vision for Samalaju and OM Sarawak – only bigger.”

Commenting on the contract update, Mr. Peter Toth, CEO of OM Holdings Limited said, “To ensure the most effective and efficient funding and execution of the Project, OM Sarawak will execute the Project in two phases. Phase 1 will fast-track higher margin ferrosilicon production to ensure optimum construction and ramp-up flexibility, while continuing with the technical and commercial optimisation of Phase 2.”

CMSB’s Group Managing Director Dato Richard Curtis said, “Demand for Ferro Alloy is expected to be robust as global and regional steel production continues to grow. Presently, China accounts for approximately 70% of the global ferro silicon and approximately 50% of global manganese alloy production. China is currently undergoing some challenges in terms of limited availability, increasing power costs, enforcement of environmental controls, rising labour costs and government imposed financial disincentives on energy intensive exports.”

“Against this backdrop, the development and commissioning of the Bakun Hydroelectric Dam and the Sarawak Corridor of Renewable Energy (SCORE) initiative will enable OM Sarawak to establish one of the world’s lowest cost Equator Principle compliant and strategically located greenfield Ferro Alloy plants. It has many competitive advantages such as competitive power pricing, reliable power supply, tax incentives, close proximity to raw material sources and is located in the fast growing East Asian regional with expanding demand and pool of customers. This in turn will accelerate CMSB’s growth moving forward and create long-term financial and strategic value for our shareholders” Dato Curtis added.

OM Sarawak is targeting production to commence in 2Q14 and expects to achieve full commissioning and full production in 2Q15.