7 % Mining Cost Reduction at OJSC PIMCU in 2014

This past week, a meeting of the internal outcomes commission was held at OJSC Atomredmetzoloto, during which the heads of affiliated companies included into the holding structure reported on executed work for 2014. During the meeting, key indicators were represented which were primarily related to implementation of production programs measures and improvement of technological process at extractive industry companies. Today, innovative solutions, their development and implementation to a production process are specifically the main factor of successful development of the holding in future.

Sergey Shurygin, Director General of OJSC PIMCU, the largest uranium mining company, reported on the completion of industrial experiment works for a number of innovative projects. He focused on the ore separation complex for processing of non-commercial dumps. After its commissioning, economical effect can equal to 100 mln rub. Also, PIMCU has worked out the mode which allows to achieve a proven reduction of manganese reactant consumption. One more highly efficient project is implementation of geo-technological uranium production methods which are cheaper compared to the conventional ones, at the mine No. 4 (method of modular underground leaching) Construction of concentrated ore recrushing complex is started, its productive capacity will equal to a million and a half tons of ore per year.

Alexey Dementiev, Director General of OJSC Khiagda, mentioned that the main production building was being prepared to commissioning. This will allow for the company to achieve the design level of mining — 1200 tons of uranium per year. Construction and installation works in the shop of sulfuric acid production are coming up to a completion. He also emphasized the compliance of the shop with the world quality standards with regard to ecological safety.

Nikolay Poponin, Director General of CJSC Dalur, mentioned, among the key indicators of the year, the start of operation of the tested drying system for uranium concentrate, which allows to reduce humidity of the final product from 30 % to 1.5 %. “This indicator complies with the ASTM core quality specification”, — he emphasized.

CJSC Primorskaya Mining Company and CJSC RUSBURMASH have represented the results of the works within a large-scale project of development of mineral resources base of Novaya Zemlya Archipelago. The second stage of field works at Pavlovskoe production field is finished in 2014. 20 thousands linear meters were drilled in harsh arctic conditions, reserves of lead-zinc ores were calculated. Next year, the permanent exploration conditions FS and reserves of production fields should be confirmed, and this will allow to design the northernmost mining company in the world. Commercial development is planned already in 2019.

Among the mid-term challenging tasks, specific attention was paid to business diversification. Market refocusing is primarily considered as a basis for ensuring of long-term financial and social stability of OJSC PIMCU. In August 2014, with the assistance of OJSC Atomredmetzoloto and in cooperation with the government of the Zabaikalye territory we created the Krasnokamensk industrial park. This park was formed to attract private investments to the South-East of the Zabaikalye territory, and it suggests the development of the following key directions: processing of pyrite cinder, building of cement plant with productivity of 326 thous. tons per year on the basis of Ust-Borzinsk limestone field, development of coal mining at Urtuyskoe surface mine office with the ability of export to the countries of Southeast Asia. Generally, it is expected that by 2019 the program of diversification will allow to create about 2000 new working places in the city of Krasnokamensk and the Krasnokamensk region.

As a result, the outcomes commission accepted working results of companies included into the holding structure. For a number of unresolved issues, additional measures were developed which allow to achieve the effective level of all production and financial indicators by the accounting period.

Summing up, Vladimir Verkhovtsev, Director General of the holding, mentioned the main achievement of the expiring year: for the first time since OJSC PIMCU was passed under the management of OJSC Atomredmetzoloto, in 2014 we succeeded to reduce unit cost of uranium mining at PIMCU by 7 % compared to the level of 2013. Despite financial instability and extremely uncomfortable conditions in the uranium market, this allowed to reverse the trend of continuous annual growth of production cost. The uranium holding plans to proceed its work in this direction. Already now the measures are developed which intended for enhancement of financial indicators of 2015.

Last year, the State Corporation has determined for the ore mining division the strategic objectives which are aimed to ensure profitability of uranium mining companies. The main indicated milestone is cost reduction for final product, uranium oxide concentrate (U3O8), both within specific plants and in view of the whole holding. Realization of the set tasks is planned within a mid-term framework in the period from 2015 to 2019.