Board Committees

The Committees established by the Board of Directors comprise Audit Committee, Remuneration Committee, Nomination Committee and Sustainability Committee. The composition and chairing of the Committees is reviewed and decided annually by the Board. Whilst the Committees have been conferred upon several significant tasks relating to the Company's governance, it should be noted that under the Finnish Companies Act the Committees have no independent decision-making power, but rather concentrate on matters delegated to them more extensively for the purpose ofissuing recommendations to the Board of Directors. The Committees report regularly on their work to the Board.

Audit Committee

The Audit Committee monitors Talvivaara's financial reporting and financial forecasts. The Committee also oversees the statutory audit and considers the independence, effectiveness and objectivity of the external auditors, including the nature and extent of non-audit services provided. In addition, the auditors themselves have processes in place to ensure that their independence is maintained, including safeguards to ensure that where they do provide non-audit services, their independence is not compromised. Based on its consideration relating to the audit services, the Audit Committee prepares proposals pertaining to the election of the external auditors.

The Audit Committee considers and keeps under review the need for and effectiveness of the Company's internal reporting and internal control policies and procedures for the identification, assessment and reporting of risks. The Committee focuses particularly on the Company's compliance with legal requirements, accounting standards and, to the extent applicable, the UK Listing Authority Listing Rules, ensuring that an effective system of internal and financial controls is maintained.

The Audit Committee has been chaired by Ms. Carr and its other members have been Mr. Titcombe and Mr. Niiva. The Chief Financial Officer attends the meetings by invitation. The Committee convenes at least four times each year. The members of the Audit Committee shall have the qualifications necessary to perform the responsibilities of the Audit Committee, and at least one member shall have expertise specifically in accounting, bookkeeping or auditing.

During 2010, the Audit Committee met four times. Attendance of the members of the Committee

Remuneration Committee

The Remuneration Committee supervises, reviews and develops the remuneration and reward schemes of the Company and the remuneration paid to the members of the Board of Directors. The Remuneration Committee makes the necessary proposals to the General Meetings of Shareholders regarding the remuneration of the Board of Directors. The Committee also makes recommendations to the Board of Directors and, within its terms of reference, decisions on Talvivaara's remuneration policies, the implementation of incentive schemes of senior management, and on reviewing the performance of Executive Directors and senior management of the Company and its subsidiaries.

The Remuneration Committee has been chaired by Mr. Niiva and its other members have been Mr. Titcombe, Mr. Haslam and Mr. Järvinen. Mr. Aaltonen was a member of the Committee until the Annual General Meeting of 15 April 2010. The Chief Executive Officer attends the meetings by invitation.

During 2010, the Remuneration Committee met twice. Attendance of the members of the Committee

Nomination Committee

The Nomination Committee considers the composition of the Board of Directors and appointment of Directors. It also advices and makes proposals and recommendations to the General Meetings of Shareholders on issues relating to the composition and nomination of the Board of Directors. The Nomination Committee reviews regularly the size, composition and effectiveness of the Board of Directors. Only members of the Nomination Committee have the right to attend the Nomination Committee meetings. However the Chairman, the Chief Executive Officer and external advisors may be invited to attend all or part of any meeting as and when appropriate. In connection with its duties, the Nomination Committee is authorized by the Board to take such independent advice (including legal or other professional advice, at the Company's expense) as it considers necessary.

The Nomination Committee comprises three independent Non-Executive Directors. The quorum necessary for the transaction of business is two. The Nomination Committee has been chaired by the Deputy Chairman of the Board (Senior Independent Director) Mr. Titcombe. Its other members have been Mr. Niiva and Mr. Järvinen. Mr. Aaltonen was a member of the Committee until the Annual General Meeting of 15 April 2010.

During 2010, the Nomination Committee met once. Attendance of the members of the Committee

Sustainability Committee

The Sustainability Committee has been established by the Board of Directors and it will start its work during 2011. The Committee focuses on overseeing that financial success of Company’s operations goes hand in hand with Talvivaara’s operations’ efficiency,  environmental performance and social responsibility and that they are ran in compliance with applicable regulations and permit conditions set by the authorities. The Committee also ensures that that the Group’s sustainability policy is implemented in order the Company to achieve its sustainability goals. Mr. Tapani Järvinen was elected as chairman of the Committee and its other members are Pekka Perä and Edward Haslam. The Chief Sustainability Officer attends the Committee meetings by invitation.