The Swiss-headquartered resources company Ferrexpo, whose main interests are in Ukrainian iron ore assets, has announced that its board has approved total capital expenditure of $647 million to commence immediately, in order to continue the implementation of the company's development projects which had largely been on hold since October 2008.
In particular, Ferrexpo has authorized expenditure of $267 million to achieve first ore from its Yeristovo deposit which will deliver 5.5 million mt of primary crushed ore to Ferrexpo Poltava Mine (FPM) processing facilities for conversion into 1.9 million mt of pellets. This is expected to be completed by Q1 2013 and will increase the company's total pellet output to 12 million mt per year of its own ore. Of the $267 million approved capital expenditure, $153 million is expected to be committed in 2011.
Ferrexpo said that it will also consider additional investments in its facilities to bring its total output to around 20 million mt of pellets/concentrate equivalent per annum.
Meanwhile, $212 million of its total capital expenditure will be invested for the upgrade of the existing concentrator facilities at its FPM processing facilities to increase the proportion of 65 percent Fe pellets to 100 percent. Currently, approximately half of Ferrexpo's production is split between 65 percent Fe pellets and 62 percent Fe pellets. The project is scheduled for completion by the end of 2014. Of the $212 million approved capital expenditure, $49 million is expected to be committed in 2011.
The remaining $168 million will be invested over a period of eight years to extend the life of the existing FPM mine to 2038. The project will involve additional stripping works in 2011 of around 15 million cubic meters to allow access to additional ore from 2014. As a result, the ore output from the existing mine will peak at 35 million mt per annum by 2014 compared to the current output of 28 million mt per annum.