Petropavlovsk associate IRC reveals operations boost, confirms Amur river bridge timeline

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Petropavlovsk PLC‘s (LON:POG) 31.1% owned associate IRC Limited has updated on the anticipated timeline for the Amur River Bridge project, which is now due by the end of 2020.


In a statement IRC confirmed local media reports that cite Russian presidential envoy to the Far Eastern Federal District, Yury Trutnev.


The rail bridge, which will connect Russia’s far east to China, is expected to enable a US$5 per tonne saving in ore transit costs to Chinese customers.


It is also expected to alleviate railway congestion of the region, and, crucially, will allow a shortening in transit times to 3 to 5 days for Chinese customers, from 7 to 10 days currently.


“I am pleased that the Russian official has assured the completion date of the Amur River Bridge,” said Yury Makarov, IRC chief executive.


“The bridge is a major infrastructure project of the Russian Far East and it is expected that it will enhance the cost and geographical advantages of IRC.”


IRC’s K&S operation close to 100% capacity


In the statement, IRC also said that it has resolved previously communicated issues with its ball mills, and, that production operations have now returned to normal.


Shipment volumes are presently restrained by ramp-up issues for its drying unit, which is used in winter to remove excessive moisture from the iron ore concentrate (to avoid freezing). The unit is currently limited to around 65% of its capacity.


IRC expects to increase shipment volumes soon.


Additionally, IRC noted a stable price environment for its iron ore product and said that as one of the major iron ore producers in Russia’s far east it expects to benefit from a more positive iron ore price environment.


Makarov added: “I am pleased that K&S is now producing at a high capacity after the issues with the ball mills have been rectified.


“Although the glitches of the drying unit temporarily affect our sales, our site team is addressing the issues and implementing mitigating measures.”


“The stable iron ore price environment is encouraging. The future prices of 65% Fe look more resilient as the Fe forward curves show increasing price premiums over the 62% Fe. K&S is set to seize the opportunities to capitalise on its advantages and make a greater contribution to IRC.”

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