Ferrexpo’s PGOK to invest about $1 billion in four major capital projects

The largest Ukrainian iron ore pellet producer and exporter, Poltava GOK (PGOK), the main iron ore subsidiary of Swiss-headquartered Ferrexpo, intends to implement four major capital projects at a total cost of about $1 billion, for the maintenance of the existing production capacities, and for the increase of iron ore mining and high grade pellet outputs.
 
Accordingly, PGOK's basic project ‘Maintenance' aimed at the preservation of stable production, provides for an annual production of 28.4 million mt of iron ore, including 15.3 million mt of high grade ore and 13.1 million mt of low grade ore, and for an annual production of 9 million mt of pellets, including 4.2 million mt of higher grade pellets and 4.8 million mt of lower grade pellets.  The cost of the project, calculated until 2015, is estimated at $570 million.
 
The second project includes the increase in ore production to 32 million mt per year, including 17 million mt of high grade ore and 15 million mt of low grade ore, and the additional production of 1.6 million mt of pellets per year. The project will be implemented between 2010 and 2030, with the production of additional higher grade pellets to be started in 2014. The cost of the project until 2015 is estimated at $130 million.
 
Another PGOK project is aimed at increasing product quality, i.e., obtaining a higher output of high grade pellets. Accordingly, starting from 2014, PGOK plans to produce 8.4 million mt of high grade pellets per year from an annual volume of 28.4 million mt of ore. This project will be implemented between 2010 and 2015, and is estimated at a cost of $185 million. 
 
PGOK's fourth development project will be directed towards the increase of pellet production to 12 million mt per year, by creating additional capacities for the production and loading of pellets in the amount of 2.5 million mt annually. The project will be implemented between 2010 and 2015, while the production of 12 million mt of pellets per year is to be started from 2015. The company will invest $90 million in this project.
 
In addition, PGOK is also implementing a program directed towards a reduction of costs for main resources: raw materials, energy resources and other materials.