About Company

11 June 2018

Business Diversification

Business Diversification

The development of new business areas remains one of the priorities of the ARMZ strategy. Key diversification objectives are as follows:

  • expansion of the product portfolio in order to minimize market risks;
  • development of existing enterprises through the implementation of projects ensuring integrated use of their competencies, infrastructure and raw materials base;
  • growth in business scale and profitability.

The basic directions of the ARMZ business diversification are determined on the basis of the approach approved by Rosatom State Corporation. In accordance with this approach, a portfolio of projects diversified by product, scale and geography has been formed. Project portfolio management is carried out according to the logic of maximizing economic results and synergies for the core business while minimizing project risks.


Fig. Product Portfolio of Existing and Emerging Businesses of JSC Atomredmetzoloto

Development of projects in mining and related industries is carried out as part of the comprehensive program in three areas:

  • increasing the depth of processing of the existing mineral resource base and industrial waste (“Scandium”, “Recycling of pyrite cinders”, projects);
  • development of areas with a special regional status (Pavlovskoye project);
  • business initiatives to develop the production of strategic metals and innovative products based thereon (under elaboration).

The interest toward the development of these areas is related to the fact that ARMZ applies modern technology for extracting useful components from the existing sources of raw materials or opportunities for their development, as well as to the necessary admittance and permits for working in restricted (regime) special status territories.

In 2016, the development of technology for the associated scandium extraction was completed and the construction of a pilot plant was launched in terms of the Scandium project. In September 2016, recognition of the scandium reserves of the Dalmatovskoye deposit was ensured, which makes it possible to extract it with the right to commercial sale. In 2017, it is planned to start the production of high-purity scandium oxides with the subsequent creation of the production of aluminum-scandium master alloys.

In 2016, economic evaluation of the technology for processing man-made waste of sulfuric acid production accumulated at the site of PJSC PIMCU was carried out within the project “Processing of Pyrite Cinders”. Based on the evaluation results, the profitability of their non-waste processing was confirmed (with the extraction of gold, non-ferrous metals and leaching cakes for the cement industry). In 2017, it is planned to proceed with the design and subsequent construction of a pilot plant with its launch in 2019.

The largest of the diversification projects implemented by ARMZ is the development project for the Pavlovskoye deposit in the Arctic zone of Russia (Novaya Zemlya archipelago) received qualitative continuation in 2016. Based on the results of the examination of the permanent exploration conditions FS and the calculation of reserves, recognition of reserves of B+C1+C2 categories in the amount of 2.49 million tonnes of zinc, 0.55 million tonnes of lead and 1,195 tonnes of silver was ensured. The total increase in reserves exceeded 20 %. Within the first stage of engineering surveys (field season 2016), a series of surveys (engineering, geological, geodetic, etc.) was carried out and a large-tonnage sample was sampled for technological ore testing. In 2017, it is planned to continue the deposit operations according to the approved plans.

Search and implementation of promising projects involving the use of infrastructure and material and technical base of the operating enterprises in the format of industrial partnership remain an important direction of the diversification program. Their elaboration is carried out at the site of PJSC PIMCU in Krasnokamensk, which is provided with transport and energy infrastructure and has the necessary personnel and production potential. These projects provide for the development of basic industries ensuring deep processing of raw materials, as well as production of products with high added value. Implementation thereof is planned as a Priority Social and Economic Development Area (PSEDA) created in 2016. In the future, this will provide PJSC PIMCU and ARMZ with additional revenue and efficient use of infrastructure.

In 2016, ARMZ continued its search for potentially interesting projects and business initiatives in Russia. Such initiatives feature the development of production of strategic metals and innovative products based thereon. Currently, this business initiative is under elaboration; its target parameters will be determined taking into account the results of the evaluation of prospective assets, as well as the availability of current and forecast demands for the respective products from the Russian nuclear enterprises.

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