Strong performance at Ferrexpo
Ukraine-based miner Ferrexpo said production and sales levels have been in line with expectations in 2008.
Pellet sales price increases of more than 90% over the previous year’s levels have been confirmed for the 2008/9 contract year for more than four-fifths of the group’s sales book.
The group said negotiations on prices for the remainder of the group’s sales book are expected to be concluded before the end of June.
The new prices will apply from 1 April 2008.
Pellet production in the first four months of 2008 was in line with management expectations, with an increase seen in product quality.
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The proportion of high quality (65% Fe) pellets produced has continued to rise this year after advancing 19% in 2007.
Inflationary pressures in Ukraine and sharp price rises in cyclical commodities, mainly steel-related materials (used in Ferrexpo’s production processes) and diesel fuel continue to have an adverse impact on production costs.
Growth projects at the existing Gorishne-Plavninskoye Lavrikovskoye (GPL) mine and the new mine developments on the Yeristovskoye and Belanovskoye deposits are proceeding on schedule.
The group is seeking a partner to invest in the development of the Yeristovskoye and Belanovskoye mines.
The board expects the group to “achieve a strong financial performance in 2008 as a result of the substantial price increases achieved this year for the group's products and the ongoing improvements in operating efficiency, notwithstanding the prevailing cost pressures.”
