Q2 2008 Post Production Repor

RNS Number : 5220Z

Ferrexpo PLC

22 July 2008

 



22 July 2008

Ferrexpo plc

Production for Q2 2008

Production in Tonnes '000	Q2	Q1	Change	Q2	Change	YTD	YTD	Change
	2008	2008	%	2007	%	2008	2007	%
Iron Ore	7,229.9	7,131.5	1.4	7,305.8	(1.0)	14,361.3	14,446.0	(0.6)
Concentrate	2,744.9	2,695.0	1.9	2,667.9	2.9	5,439.9	5,293.1	2.8
Pellets from produced raw materials	2,271.7	2,232.7	1.7	2,232.8	1.7	4,504.4	4,450.1	1.2
62% Fe	1,304.7	1,279.4	2.0	1,268.4	2.9	2,584.1	2,672.6	(3.3)
65% Fe	967.0	953.3	1.4	964.4	0.3	1,920.3	1,777.5	8.0
Pellets Total	2,328.1	2,268.2	2.6	2,324.2	0.2	4,596.3	4,652.8	(1.2)
62% Fe	1,361.1	1,314.9	3.5	1,359.8	0.1	2,676.0	2,875.3	(6.9)
65% Fe	967.0	953.3	1.4	964.4	0.3	1,920.3	1,777.5	8.0

Highlights

• Production in Q2 2008 on target, with increased output of pellets and proportion of higher grade (65% Fe) pellets

• Total pellet output in Q2 2008 increased by 2.6% compared to Q1 2008

• Production of pellets from own raw materials increased by 1.7% compared to Q1 2008

• Selective mining increased rich ore extracted in H1 2008 by 5.4% versus the equivalent period in 2007 and reduced total ore extracted

• Extraction of richer ore yielded an additional 2.8% concentrate in the first six months of 2008, and 8% more 65% Fe pellets in the same period

• Stripping volumes increased by 12% in H1 2008 compared to H1 2007, underpinning future iron ore production growth

• Third party concentrate purchases remained low in Q2 2008 due to market tightness; focus remains on pellet production from own raw materials

• Sharp increases in diesel and steel production input prices in line with international commodity price increases have increased costs in H1 2008

• Ukrainian PPI cost inflation for the six months to 30 June 2008 amounted to 29.4%

• Significant cost pressures partially mitigated by continuing operational efficiency improvements

• Average achieved price on a DAF/FOB basis for Q2 2008 rose by 92.6% compared to Q1 2008

• Project to expand and extend existing operations continued on schedule and within budget

Viktor Lotous, Chief Operating Officer of Ferrexpo, stated: 

'In the second quarter of 2008, we commissioned several items of new mining equipment which have enabled the Group to step up the extraction of rich ore from our existing mining operations. This growth in rich ore has resulted in an 8% increase in the amount of higher grade 65% Fe pellets produced in the first six months of 2008 enabling us to meet our product quality improvement objectives. At the same time, stripping operations at our GPL expansion project have positively impacted our overall stripping volumes, helping to expose the necessary iron ore for the next phase of production. This project continues to proceed as planned. Although Ukrainian inflation remains high and we have continued to experience sharply rising costs associated with diesel and steel inputs in the second quarter, we are pleased that these cost pressures have been partly mitigated by continuing successes in operational efficiency improvement at our GPL operations.'

For further information, please contact:

Ferrexpo: Gavin Mackay	[phone]
Finsbury: Robin Walker  Alex Simmons	[phone]
Ferrexpo Poltava Mining (Ukraine): Alexander Dovgalev	[phone]

Notes to Editors:

Ferrexpo is a Swiss headquartered resources company with assets in Ukraine, principally involved in the production and export of iron ore pellets, used in producing steel. Current output is over 9 million tonnes, approximately 85% of which is exported to steelmakers around the world. The Group is currently undertaking a significant growth programme and is listed on the main market of the London Stock Exchange under the ticker FXPO. For further information please visit www.ferrexpo.com.

 

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