25 Jul 2019 16:54

IRC hedges about 50% of its 2019 production with banks

KHABAROVSK/MOSCOW. July 25 (Interfax) - IRC has hedged about 50% of its production with banks for this year, CFO Danil Kotlyarov told Interfax on the sidelines of the MINEX-DV forum in Khabarovsk on Thursday.

The banks are acting as mediators in the sale of derivatives at trading platforms such as the Singapore Exchange.

In H1, iron-ore concentrate with iron content of 65% got approximately 49% more expensive, and IRC decided to protect itself from price decreases.

"Certain deals that made ended in gains, now some deals are bringing losses - that's a normal situation. Nonetheless, we're hedging about 50%, but we're doing this with banks. In our experience, customers don't work at fixed prices. Accordingly, we do hedging deals with banks - Gazprombank and Sberbank . We also have a partner overseas, but our main partner is Gazprombank," Kotlyarov said.

The current capacity of IRC's Kimkano-Sutarsky GOK is 3.2 million tonnes of iron-ore concentrate per year.

IRC is the only iron-ore producer in Russia's Far East. Its biggest shareholder is the gold miner Petropavlovsk (31.1%).