Investment program for oldest Russian nickel plants could quintuple
CHELYABINSK. Dec 3 (Interfax) - The investment programs for OJSC Ufaleynickel (Chelyabinsk Region) and CJSC Rezhnickel and the Serov mine (Sverdlovsk Region), which are part of Ural Metallurgical Group, are to be increased 5.1-fold to 685 million rubles in 2013, the group said in a press release.
The investment program includes purchase of equipment, financing of R&D, planning and design and managerial and engineering work for the plants' future development.
"Despite the fact that our plants are currently in a difficult position along with the whole industry, we are trying to find opportunities to improve technology and replace equipment," Ufaleynickel managing director Eduard Karpenko said in the release.
The release said that the plants carried out a number of measures in 2012 to improve operating efficiency as part of a modernization program. "Measures to replace equipment and optimize technology have already made it possible to not only improve working conditions, but also achieve a significant reduction of per-unit expenditure of coke - a major element of production costs. The continued implementation of this modernization will make it possible to steadily bring the plants to a breakeven level," the release said.
Ufaleynickel and Rezhnickel, Russia's oldest nickel plants, were part of the OJSC Koks group until the summer of 2010, when their shares were bought from Koks in equal stakes by the three principal shareholders of the Industrial and Metallurgical Holding (IMH): Boris, Yevgeny and Andrei Zubitsky.
At the end of 2011, it was reported that the Urals nickel plants had been acquired by Highmetals KDS. Moscow-based Highmetals KDS is a management consulting firm owned by brothers Alexander and Artem Timofeyev,
The Ural plants, whose equipment and technology has not been modernized since it was launched in the mid-1930s, have become unprofitable amid the slump in nickel prices. Ufaleynickel, the chief local employer, has been operating at a loss, while Rezhnickel shutdown production in November 2011 and in March relaunched two shaft furnaces.
Ufaleynickel, Russia's third largest nickel producer, produces nickel from raw material from the Serov nickel mine, and also used nickel scrap and nickel matte from Rezhnickel. The plant produced 14,000-16,000 tonnes of nickel annually prior to the crisis. Prior to 2008, the plant also produced cobalt from cobalt concentrate supplied by Norilsk Nickel.
