Ballard Invests in UCAR's Graftech Subsidiary; Graftech and Ballard Enter Into New Exclusive Development and Supply Agreements for Fuel Cell Materials and Components

Business Wire, June 6, 2001

Business Editors

NASHVILLE, Tenn.--(BUSINESS WIRE)--June 6, 2001

UCAR International Inc. (NYSE:UCR) and Ballard Power Systems Inc. announced today that they have entered into a new exclusive development and collaboration agreement and a new exclusive long-term supply agreement for natural graphite-based materials and manufactured components for BALLARD(R) fuel cells and fuel cell systems. Ballard will also become a strategic investor in Graftech Inc., a wholly owned subsidiary of UCAR, investing US$5-million for a 2.5% ownership interest in that subsidiary, to support fuel cell development and commercialization.

The scope of the new agreements significantly expands upon Graftech's and Ballard's initial collaboration announced in 1999. The development agreement, which has been extended from 2002 in the initial collaboration to 2011, includes natural graphite-based materials and components for use in proton exchange membrane (PEM) fuel cells and fuel cell systems for transportation, stationary and portable applications. The joint development program will concentrate on the development of cost-effective graphitic materials and components, including flow field plates and gas diffusion layers. As a part of this arrangement, Graftech will also develop and manufacture prototype materials and components and provide early stage testing of these prototypes in an on-site fuel cell testing center.

Under the supply agreement, which has been extended from 2008 in the initial collaboration to 2015, Graftech will be the exclusive manufacturer and supplier of natural graphite-based materials for BALLARD(R) fuel cells, including GRAFCELL(TM) advanced flexible graphite for use in flow field plates for Ballard's Mark 900 fuel cell. It is Ballard's intent that Graftech be the exclusive manufacturer of all flexible graphite-based components that Ballard decides not to manufacture in-house.

Under the agreements, Graftech has the right to manufacture and sell, after agreed upon release dates, natural graphite-based materials and certain components, for use in PEM fuel cells, to other parties. In connection with the manufacture and sale of components, Ballard will grant Graftech a royalty bearing license for related manufacturing process technology.

"Graftech's advanced flexible graphite technologies and engineering capabilities will play a significant role in supporting the commercialization of BALLARD(R) fuel cells. As a long-term supplier to Ballard, Graftech has demonstrated its ability to provide us with a product that meets our needs. We are excited to be working together with Graftech to collaborate on the joint development of components which will allow us to further reduce our costs, improve performance and provide increased manufacturing capability," stated Kip Smith, Ballard's President and Chief Operating Officer. "Ballard's equity stake in Graftech confirms our commitment to the success of this collaboration."

Gil Playford, Chairman of UCAR, stated, "We are excited about the opportunity to broaden our strategic role with Ballard from supplying fuel cell materials to also include both the development of fuel cell components with Ballard and their production. We are very confident that the proven success of our GRAFCELL(TM) materials in the BALLARD(R) Mark 900 fuel cell, where we have achieved targeted performance and cost objectives for flow field plate materials, will be replicated in our newly expanded efforts. Graftech's new advanced flexible graphite line was installed in anticipation of these agreements in order to meet the sales demand of Ballard for the next 2-3 years." Mr. Playford continued, "The new agreements position us to capitalize on the exciting long-term growth opportunities in the emerging fuel cell market. We will supply the industry recognized leader in PEM fuel cells and will also have the ability to take Graftech's products to the broader market in the long term."

Prototype fuel cell vehicles which have utilized, or will utilize the BALLARD(R) Mark 900 fuel cell containing Graftech's GRAFCELL(TM) advanced flexible graphite materials include Ford's TH!NK FC5 and DaimlerChrysler's NECAR 5 automobile and the buses that are part of the recently announced DaimlerChrysler European transit bus program.

UCAR International Inc. is one of the world's largest manufacturers and providers of high quality natural and synthetic graphite and carbon based products and services, offering energy solutions to industry-leading customers worldwide engaged in the manufacture of steel, aluminum, silicon metal, automotive products and electronics. The company has 15 manufacturing facilities in 8 countries and has the largest share of the free trading markets in all of its major product lines. UCAR produces graphite electrodes that are consumed primarily in the production of steel in electric arc furnaces, the steel making technology used by all "mini-mills," and for refining steel in ladle furnaces. The company also produces carbon electrodes that are consumed in the manufacture of silicon metal and cathodes that are used in the production of aluminum.