British Ferrexpo plc, which controls in Ukraine, in particular, Poltava and Yeristovo mining and processing plants, increased capital investments by 75.2% in 2021 compared to 2020, to $361 million from $206 million.
According to an annual report released by the company on Tuesday, in 2021, the capital investment per tonne of produced products was $160/tonne, while in 2020 this figure was $109/tonne.
At the same time, it is specified that last year, following the projects to increase the capacity of the processing plant (in 2020), the company began to modernize and increase the capacity of its granulator (pelletizer).
Of the $361 million, maintenance and capital expenditures for modernization totaled $113 million in 2021 (2020 – $103 million), including investments in all of Ferrexpo’s core business units. At the same time, investments were directed to the group’s concentrator and granulator, including an increase in capacity – the costs amounted to $111 million (in 2020 – $34.3 million). In addition, Poltava Mining has invested $34 million in a press filtration plant, which is scheduled for completion in 2022.
Additional capex areas are stripping for $69 million in 2021 (2020 – $14 million) and $6 million invested in infrastructure, development and exploration of the Belanovo field (Belanovo Mining), Haleschynske and Pivnichne fields (2020 – $6 million).
In addition, 2022 marks the 15th anniversary of the listing on the London Stock Exchange. During this time, the company has invested more than $3 billion in production, becoming the world’s third largest exporter of iron ore pellets, and is also starting to supply products with a higher iron content (67% Fe) to global markets.
The Group continues to invest and develop its assets, the report states.
After the completion of the initial upgrade of the pelletizing lines, it is planned to enter the next phase of growth, which will increase production of pellets by 3 million tonnes over the next three years. In October 2021, a decision was approved to focus on ore processing and high iron product operations while maximizing production and customer satisfaction.
At the same time, the company intends in the future to increase the total volume of ore production from 125 million tonnes in 2020 to about 265 million tonnes, spending $180 million on this. It is planned to invest $240 million to increase the capacity of crushing equipment and beneficiation to more than 45 million tonnes – contracts have already been signed with Metso and Weir Minerals.
In addition, to increase the capacity of one granulator line (out of four) by 3 million tonnes, investments will amount to $181 million.
It is planned to spend $28 million to solve logistics issues for transporting additional 3 million tonnes of pellets, which will require increasing the capacity of its port and purchasing additional wagons.
At the same time, the report states that investments to increase production by about 25% of existing capacities have been temporarily suspended by the group due to the war in Ukraine, but projects will be resumed after the situation in the country is clarified.
