Swiss-headquartered resources company Ferrexpo, whose main interests are in Ukrainian iron ore assets, has said that, given the material improvement in the iron ore markets and in current pricing levels, for the current year it is considering increasing its level of expenditure and is re-evaluating project budgets and schedules.
Accordingly, Ferrexpo is implementing a plan to improve the grade of iron ore concentrate by implementing additions to and modifications of the existing crushing and concentrating facilities with the aim of achieving the capability to produce up to a 100 percent proportion of 65 percent iron content pellets. The project is expected to be completed within three years.
In addition, Ferrexpo plans a $225 million capital expenditure for its Yeristovo iron ore deposit, in order to achieve first ore in 2013. Accordingly, Yeristovo, with probable reserves of approximately 632 million mt of iron ore, is to be developed in stages, first developing the mine, then adding concentrating and processing capacity and finally pelletizing capacity. The total cost for the completion of the mine, processing plant and pelletizer is estimated at around $1.5 billion.
Ferrexpo anticipates that the project will increase the production of pellets initially processed by the existing Poltava mining facility from the current 9 million mt to 12 million mt per annum, and by 2018 even to 19.5 million mt of pellets per year, with the balance of any iron ore output to be processed and sold as merchant concentrate.
Meanwhile, with its Northern Pushback expansion project currently planned at the Poltava mining facility, Ferrexpo plans to extend the current pit to access additional high quality K22 ore at the northern end of the Lavrikovskoe deposit. The extension is expected to increase mine capacity by approximately 3.5 million mt per annum of ore which, after processing, should convert into approximately 1.2 million mt per annum of 65 percent iron content pellets. The projected overall cost was initially estimated at $159 million. Ferrexpo said it is currently revaluating the project's schedule and budgets, and is expected to resume the project when market conditions allow. The Northern Pushback project was initiated in 2007 and was subsequently put on hold in October 2008.