Ukraine's UMCC aims to restart Irshansk ilmenite mine, bring output up to target

MOSCOW. May 26 (Interfax) - Ukraine's United Mining and Chemical Company (UMCC) plans to resume mining and processing of ilmenite concentrate at its Irshansk Mining and Processing Plant (Irshansky GOK) and bring production up to 18,000 tonnes per month by the end of this year.

UMCC is holding active negotiations on the sale of Irshansky GOK's products to western partners, the company's press service reported, citing management board member Dimitry Kalandadze.

"Irshansky GOK suspended operations in November last year. There are now almost 54,000 tonnes of ilmenite concentrate and 100,000 tonnes of rough concentrate at the plant's storage facilities and ports. We have to start selling it in order to launch mining of new ore," Kalandadze said.

"Restoring the sale of products will enable us to gradually restore mining and processing. We plan to already reach a production level of 18,000 tonnes of ilmenite concentrate per month before the end of this year. This is almost the level of the target that we set at the beginning of 2022," he said.

He also said that increasing the resource base is a key factor for the successful privatization of UMCC by a western investor.

"A western strategic investor is the best solution for Ukraine. For UMCC, this is a kind of 'second wind' that will continue the path toward the modernization of the whole sector, which has one of the highest capitalization indicators," the press release said.

The company said its new management and Ukraine's State Property Fund have worked out a development strategy that indicates the deposits needed to increase the resource base. This will ensure that the potential investor can securely develop intensive processing and introduce new technologies without worrying that reserves will be depleted. UMCC, in turn, will get long-term financing, modern technology and systemic counterparties, the company said.

The Property Fund believes that the launch of production at the Zaporozhye Titanium and Magnesium Plant could have a positive impact on UMCC's operations, so options are being explored to restart its operations, the Fund said in a press release.

"Despite the fact that the enterprise was returned to the ownership of the state and is now de jure under the management of the Fund, we are constantly facing resistance from the previous owners. But we have a plan for how to restore the production chain," the statement said.

UMCC began actual operations in August 2014, when the Ukrainian government decided to give it control of the assets of the Volnogorsk Mining and Metallurgical Plant and Irshansky GOK. They were previously leased by businessman Dmitry Firtash.

In August 2016, the government put UMCC on the list of companies slated for privatization in 2017. The privatization was postponed several times, with tenders repeatedly called off.

UMCC previously sold its products to more than 30 countries and was one of the world's largest producers of titanium raw materials, with a 4% share of the global market.