Earthworks. Living Our Values.

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1 Earthworks Living Our Values WORLD HEADQUARTERS Kennametal Inc Technology Way Latrobe, PA USA Tel: (United States and Canada) EUROPEAN HEADQUARTERS Kennametal Europe GmbH Rheingoldstrasse 50 CH 8212 Neuhausen am Rheinfall Switzerland Tel: ASIA-PACIFIC HEADQUARTERS Kennametal Singapore Pte. Ltd. No.11 Gul Link Jurong Singapore Tel: INDIA HEADQUARTERS Kennametal India Limited 8/9th Mile, Tumkur Road Bangalore Tel: Kennametal Inc. All Rights Reserved B

2 A Message from the Vice President and General Manager MISSION Kennametal delivers productivity to customers seeking peak performance in demanding environments by providing innovative custom and standard wear-resistant solutions, enabled through our advanced materials sciences, application knowledge, and commitment to a sustainable environment. VISION To be recognized as a premier, customerdriven enterprise that delivers our promise of exceptional value, growth and productivity solutions to our customers, consistent returns for shareholders, and rewarding careers to employees. Tough times demand tools that are up to the challenge. Kennametal engineers our products to be the best in business, stronger than anything you put us up against, and lasting so you can realize maximum productivity day after day, and year after year. Whether you re mining a face, digging a trench, sinking foundations, or milling a road, we strive to meet your needs for low dust, fine finish, fast production, and low energy consumption. At Kennametal, our commitment to your most demanding underground mining, surface mining, or construction applications is unparalleled. We have a long history of helping you achieve success and a tradition of exceeding your expectations. While we remain focused on redefining and advancing the earthworks industries through our world-class solutions delivered by professionals who subscribe to Kennametal s unique brand of Different Thinking we are also committed to the health and profitability of your enterprise. Our lean and sourcing initiatives contribute to cost effectiveness, even as our critical raw material costs continue to escalate to never before seen levels. Still, our investments in improved manufacturing and logistics efficiencies have kept prices rising at a pace slower than material costs because, more than anything, Kennametal values our long-term partnership with you. ENVIRONMENT INNOVATION PEOPLE PERFORMANCE INTEGRITY CUSTOMERS Recognizing that you have a choice, we thank you for your loyal support and pledge to continue earning your business through effective innovation, performance, and service every day, every year. Eric V. Gentis Vice President and General Manager Earthworks Business Kennametal Inc. USA KENNAMETAL 1

3 Kennametal is dedicated to the realization of your success, providing you with the tools and support to achieve optimum productivity. Substantially Reduce Roof Bit Cost In 2008, one of the world s largest private-sector coal companies asked for Kennametal s help in reducing roof bit cost at one of their mines. We found that our Reman RRWT tools lasted longer and drilled faster than the current roof bit tool they were using. We trained the roof bolter operators, set pressures, and arranged to get used bits returned to Kennametal. These changes saved the customer more than $1.4 million in roof bit costs over two years. PERFORMANCE TM PROVEN RELIABILITY. UNPARALLELED PRODUCTIVITY. Underground or on the surface, the foundation for a successful mining operation is built on rock-steady forward progress. Kennametal, the world s leading tooling and services provider, is proud to offer SOLID, our solution-focused program that delivers new levels of performance and productivity. Prevent Downtime Caused by Drum Replacement One of the highest-quality bituminous coal producers in the USA was struggling with bore wear on its K225 longwall drum systems. After measuring the bore internal diameter on 40 of the customer s worst blocks, Kennametal built several oversized inserts and installed them during the same weekend. The inserts kept the mine operators from switching out their drums, preventing a considerable amount of trouble and downtime. Find a Solution to Frequent Liner Plate Breakage A global leader in gold mining was constantly breaking the 200mm x 200mm (8" x 8") cast liner plates in its Sicoma Cement Mixer, replacing as many as five concrete liners per week, each time requiring three to four man hours. Kennametal replaced these with 16mm (0.625") two-layer Super-C liners. Since then, the customer hasn't needed to replace any pieces, saving valuable time and money. Reduce Customer s Annual Budget by 7% One of the largest and most efficient coal producers in the USA allowed Kennametal to test a Tri-Braze TM dragline bucket against its current bucket. The Tri-Braze bucket outlasted the competition's best run days by 126 days, single handedly reducing the customer s budget by 7% a savings of over $300, PERFORMANCE KENNAMETAL 3

4 Kennametal's goal of 100% safety extends far beyond the office to reach customers at their work sites, encouraging a community that values the implementation of safety procedures. Resolve Safety Issues Within a Critical Time Frame A paving customer in Southwest USA reported a potentially loose object within a drum of its recently purchased road milling machine, likely caused by an extreme amount of customer-applied hardfacing. With an unmatched turnaround time, Kennametal removed, inspected, rebalanced, and returned the drum. It has performed exceptionally well ever since. PEOPLE FOCUSED PROTECTION. OPTIMUM SECURITY. Kennametal ensures safety compliance by thoroughly testing and inspecting products and confirming that vehicles are appropriately equipped with safety equipment. Safety training is readily available to employees and customers alike. Whether in the office or at a customer s site, our employees drive a culture of 100% safety. Design a System to Ensure Safety Compliance When a coal mining customer failed its roof bolter dust inspection, Kennametal s engineers designed a dust-catching device for the customer s pinning steel. The design brought the mining company back into compliance and in the process caught the attention of inspectors who recommend it for other mines having dust issues. Reduce Hazardous Conditions A mine in Southern USA was experiencing heavy vibrations with its continuous miner using AM511PFG conical tool while mining a very hard coal 40-grind with a slow sump rate. Kennametal tested A14 80 ProPoint TM, which increased the sump rate by 25% and reduced miner vibrations and dust. Very pleased with the results, our customer decided to change to this bit on both sections. Continually Provide a Safe Workplace A Kennametal mining customer asked us to evaluate the cutting system on a miner that was consistently above the maximum dust exposure levels permitted by MSHA. After inspecting their tools and inserts, Kennametal suggested removing the hard-faced inserts that were pressed into the head, and recommended using the AM514K coal bit. These changes alone brought the customer back into compliance. 4 PEOPLE KENNAMETAL 5

5 A partnership with Kennametal means having the knowledge, tools, and support you need when you need it. Every day, our customers place their trust and confidence in us to go above and beyond to meet their needs. Avoid Costly Downtime A main bucket pin for a shovel failed at a large coal mining operation. With the next delivery two weeks away, Kennametal s Tricon TM shop confirmed size and shape, cut the 250mm (10") diameter shaft to length, and delivered to the customer in time for service the next day. Downtime for this particular machine was estimated at over $1,000 per hour, a major savings the customer attributes to Kennametal Tricon. INTEGRITY Deliver on a Tight Deadline A mine in Queensland, Australia required two nuts to extract sleeves on its shearer blocks. These nuts were only stocked in Sydney. Aware of their remote location and crucial need, Kennametal manufactured the nuts in Mackay and hand delivered them the next morning logging 600 kilometers (375 miles) and gaining a loyal customer in the process. CUSTOMER DRIVEN. Solution Oriented. With customer support available 24/7, Kennametal unites approximately 340 application experts across 40 countries for a combined experience of over 3,000 years in the mining industry. Every month we travel over 800,000 kilometers (500,000 miles), responding to customer needs within 24 hours and becoming what 80% of customers recognize as their supplier of choice. Quickly Produce and Deliver Custom Tooling to Avoid Downtime On a Thursday morning, after breaking yet another tie-rod in its metal shredding hammer mill, a mining customer decided to switch to Kennametal Triloy TṂ The customer wanted to order replacements for all four of their mills, but needed to be running again by Monday morning. Kennametal checked inventory on 50mm (2") tie-rods; turned, ground, and polished the bar; quoted a price; and threaded and shipped the parts on Friday. Have Custom Inventory Readily Available A mine located in Ohio, USA regularly ordered crusher hammers for its coal sizer that were cast out of a special material at a foundry in Oregon. It was soon apparent that the customer s stocking agreement for two sets could not keep up with their demand. To resolve this issue, we simply added two more sets of hammers to our stock always ready to provide our customer with what they needed. 6 INTEGRITY KENNAMETAL 7

6 We protect our planet with a commitment to reduce the global impact Kennametal and our customers have on the environment establishing effective sustainability practices and policies within the mining industry. Produce a More Effective Tool with Existing Equipment A mine located in the USA s Illinois coal basin hit sandstone roll and could not cut forward, in top, or in bottom with its miner drums. The customer asked Kennametal to build an effective lacing pattern for the drum. With the recombination for a Kennametal 32mm (1.25") lacing Rock Drum, the customer cut the bottom and was able to go under the roll to get to the main body of coal. The operation was accomplished with a low bit cost and without damage to the continuous miner. ENVIRONMENT Reduce the Frequency of Drive Shaft Replacements On a Thursday, a Kennametal customer called, needing a drive shaft for a bark boiler screw that had broken. On Monday, Kennametal delivered a shaft to the customer that was designed by Kennametal Tricon to solve the breakage problem. The company was so pleased with the results that it ordered 15 more for a complete set. GLOBAL IMPACT. POSITIVE FORCE. Helping customers meet their overall goals is clearly an objective of Kennametal s sustainability program. We focus on products that provide customers with lower fuel costs, reduced packaging requirements, lower transportation costs, and improved product performance. Kennametal continues to evaluate improved packaging materials such as biodegradable options. By helping customers address their needs to become more efficient, we make ourselves more sustainable. Supply Parts for Equipment Refurbishment On December 1, 2010, a site in Perth, Australia had an urgent request for 100 TH3S blocks. Though stock was held in the USA, Kennametal was able to fulfill and ship the order the next day. The customer received their parts on December 8, meeting its tight schedule for drum refurbishment. Decrease Prices Through Recycling In the spring of 2010, Kennametal reclaimed 50 barrels of tools from customer stockpiles in a single region through our bit recycling program. Kennametal compensated at competitive market rate per 55 gallon drum. The program gave our customers a significant cost savings of approximately $0.23 per bit. 8 ENVIRONMENT KENNAMETAL 9

7 By constantly evaluating the performance of our products and improving upon them, Kennametal remains a leader in the industry. Our resolve to offer you the best solution for your application results in products that keep Kennametal ahead of technology s cutting edge. THE VALUE Superior Tool Design An innovator in road recycling recently purchased 20 skids of Kennametal s new RoadRazor ECO TM tool RX04-01, as the majority of the company s crews demanded the tools onsite. With a better road pattern, less vibration on machine, and longer tool life, the company s equipment managers assert that RoadRazor ECO is a far superior tool than others in their arsenal. INNOVATION THE VALUE Significantly Improve Incremental Tonnage Using Kennametal s New Core Breakers system, a large mining operation significantly improved its incremental tonnage from 600,000 tons to 735,000 tons in the same amount of time. Kennametal s interchangeable bit solution uses easily replaceable picks, reducing downtime and injuries to workers. ADVANCED EXPERTISE. EXCEPTIONAL APPLICATION. In addition to providing our customers with technical support and inventory despite the challenges of recession and boom, Kennametal is constantly evaluating and upgrading our products so you can continue to succeed resulting in over 2,500 grades and 15 different steel platforms that deliver solid productivity under the most demanding conditions. THE VALUE Evolution in Abrasion- and Impact-Resistant Alloy Steel Designed for extreme wear conditions, Tri-Braze TM Dura-Plus technology provides a combination of hardness, toughness, formability, and weldability that is unavailable in any other wear plate. THE VALUE Increase Energy Efficiency That s Different Thinking. That s Kennametal. The foundation for a successful mining operation is built on steady progress. Kennametal's ProPoint TM conical tool platform combines a unique slim-line construction with our special NB tip to drastically reduce cutting forces. As a result, you get ultimate penetration, more uniform material size and shape, and minimum dust all while consuming less power. 10 INNOVATION KENNAMETAL 11

8 Demanding environments require effective equipment, and when a customer encounters an obstacle, Kennametal accepts the challenge to solve it. Our utilization of this customer-driven approach has, and will continue to set industry standards. Reduce Costs by Increasing Product Life A Northwestern USA mill of a leading paper manufacturer had a blowline pipe for sawdust that spanned between two buildings over 12 meters (40 feet) in the air. The company needed to replace the pipe once a year with a cost dramatically increased by renting a crane at $3,000 per day. Kennametal manufactured a Super-C pipe that has been in use for over nine years without requiring repair, significantly reducing the company s product replacement costs. CUSTOMER Increase Wear-Resistance at a Reasonable Price During the manufacturing of charcoal briquettes in a Northwestern USA plant, ash was getting in the grease of sealed bearings causing the shafts to wear out every three months. It was a major expense to repair both in manpower and downtime. To resolve, Kennametal produced an induction-hardened shaft for the company that has been in use for over four years, costing only 40% more. UNCOMMON VISION. UNRIVALED CONCENTRATION. Kennametal s Lean and Six Sigma trained professionals are working to design the safest, most productive solutions for the mining community. With a brainpower consisting of 85 PhDs and over 500 master s degrees, we have produced over 65 patents and have grown to manufacture products in 11 different locations around the world. Offer a Variety of Tool Designs for Demanding Environments A milling contractor in Midwestern USA was milling off an extremely hard and abrasive asphalt aggregate consuming almost 100 teeth per hour, and causing excessive wear to tooth holders. Kennametal not only secured extra teeth for the company but also sent several tool designs to test along with a field representative for hands-on support. Kennametal s RoadRazor RT20 in particular outshone the others almost two to one in extremely demanding conditions. Continuously Provide Knowledge and Information About New Technologies In the last few years, Kennametal, through its weekly sales feedback reports, has created a global culture of exchanging ideas. Time and time again, knowledge gained in one part of the world benefits another customer hundreds of miles away. 12 CUSTOMER KENNAMETAL 13