(Alliance News) - IRC Ltd, a Hong-Kong-based investee of gold miner Petropavlovsk PLC, on Monday said its Russian iron ore project is now working close to full capacity after previously encountering operational issues.
London-based Petropavlovsk has a 31% stake in IRC, which predominantly operates in the Russian Far East region and in China.
Issues with the K&S project's ball mills, instruments used to grind minerals, hurt operations at the Russian asset in late November and early December. These operational difficulties have since been resolved, IRC said.
IRC added: "It is pleasing that production is now back to normal, although K&S's operation was affected during the time when the site team worked on the ball mills."
Shipment volumes at K&S have been constrained however, due to issues at the asset's drying unit. The drying unit is used to remove excess moisture from ore during winter months.
IRC explained: "Due to some technical issues, the capacity rate of the Drying Unit is currently limited to roughly 65%, and the shipment volume of K&S is affected. The K&S site team is now investigating the issues and implementing different mitigating measures, and it is expected that the capacity rate of the Drying Unit and shipment volumes will soon be increased."
The company added that construction of the Amur River Bridge, railway infrastructure that will connect Russia and China, is set to be completed by the end of 2020. The bridge can save up to USD5 per tonne for shipments to Chinese customers from the K&S project.
IRC said: "The global economic outlook also looks more positive with the United States and China reportedly having reached consensus on the terms of a 'phase one' trade deal. As one of the major iron ore producers in the Far East Russia, IRC can benefit from the strong iron ore price environment, particularly the 65% iron ore market."
Petropavlovsk shares were trading 0.3% higher in London on Monday morning at 12.66 pence each.
By Eric Cunha; ericcunha@alliancenews.com
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