Meeting of the Commission for Reserves Accounting of ARMZ Uranium Holding Co. and Its Subsidiaries and Affiliates Held

On October 29–30, a meeting of the Commission for Reserves Accounting, with participation of top managers from ARMZ Uranium Holding Co. (JSC Atomredmetzoloto), enterprises operated by the Holding Company, and the Company’s projects, was held. The event was aimed at adjusting the action programme of JSC Atomredmetzoloto for the next three years and updating its development prospects in view of the change on the world’s natural uranium market.

Main focus at the meeting was discussion of methods to reduce operation costs and optimize investment spending unable to provide for a quick positive effect under new circumstances. Chief executive officers of the Holding Company’s subsidiaries and affiliates were responsible for presenting their individual action plans to resolve the stated tasks.

According to Igor Zhilkin, First Deputy Director General – Chief Operating Officer of JSC “Atomredmetzoloto”, the meeting’s participants were asked to evaluate impact of such new external challenges as demand contraction and steady slide in prices for natural uranium. “Taking into account the current situation, it was necessary first of all to review the Company’s mid-term action programme, as well as to ensure the Holding’s competitive advantage”, noted Igor Zhilkin.

According to Marina Liborakina, Deputy Director General for Strategy with JSC “Atomredmetzoloto”, optimization activities are currently undertaken by all uranium mining companies throughout the world and almost all uranium mining enterprises in Russia. “Any production reorganization should be carried out on the basis of social responsibility principles. Concerning the largest asset within ARMZ Uranium Holding Co. – Priargunsky Industrial Mining and Chemical Union (JSC PIMCU) – it is necessary to significantly adjust its mid-term development programme, which was prepared last year. In view of the fact that JSC PIMCU is a city-forming enterprise, socio-economic problems of Krasnokamensk and the Trans-Baikal Territory at large will definitely be taken into account when introducing any changes. Professional personnel and advanced production and technical competencies can be used as a supporting platform for diversification and development of new business areas,” emphasized Marina Liborakina.

As estimated by participants in the meeting of the Commission for Reserves Accounting, most of the subsidiaries and affiliates have coped with the task having been set and presented optimal action plans. Experience of JSC Dalur was mentioned among the most successful managerial practices. With respect to those companies, who could not find their way in the changing environment, personnel decisions will be made. Also, the meeting’s participants discussed methods to encourage improvement suggestions, related to optimization of the Company’s activity, received directly from workplaces.

As Igor Zhilkin noted, the task of ensuring the company’s efficiency in the mid-term outlook is quite realistic. “A number of projects for commissioning new capacities will require an optimization period and search for new technical, economic, and engineering solutions. Once the optimal actions are determined, we will be able to implement them on a new technical platform,” said Igor Zhilkin.

Among measures to enhance efficiency, the meeting’s participants proposed to reduce expenditures for materials and components, for example, through category management, and also to optimize payroll and salary budget, mainly with respect to administrative and managerial personnel. The Holding’s service companies – JSC Rusburmash and JSC VNIPIpromtechnologii – were instructed to start their operations on external markets. ESK ARMZ LLC, which supplies raw materials, expendables, and equipment to ensure an uninterrupted production cycle in the mining companies, will also launch a new format of work. The area of the company’s activity will be expanded, while its functions will additionally include: market studies; search for direct suppliers; identification of opportunities for decreasing prices and providing discounts due to closer cooperation with contractors.

Summarizing the discussion results, Vladimir Verkhovtsev, Director General of JSC Atomredmetzoloto expressed confidence that the Holding and the companies under its operation will successfully resolve the tasks having been set. He also highlighted that one of the main targets of ARMZ for the coming years will be exploring new business areas. “Currently, ARMZ is engaged in an active dialogue with financial and industrial partners and is studying more than ten projects, in particular, in the area of handling technogenic raw materials. I am certain that despite all challenges, associated with market changes, ARMZ Uranium Holding Co. and its subsidiaries and affiliates will continue their progressive and stable advancement”, emphasized Vladimir Verkhovtsev.