Kuranakh 2008 Progress
First Shipments of Pre-concentrate
On 19 June 2008, Aricom announced that it had completed the first product sales from Kuranakh. The shipped product was an iron ore pre-concentrate that was mined and processed from the Kuranakh deposit. This was an initial sale from previously stockpiled material which was delivered, by truck, from Kuranakh to the Aricom loading yard at the Olekma railway station. Regular shipments of iron ore pre-concentrate from the crushing and screening plant, amounting to 5,864t, were delivered in October and November. In early December, owing to the rapidly deteriorating market conditions no longer supporting the economic value in selling pre-concentrate, sales were suspended to await commissioning of the Olekma processing plant in mid-2009. By 31 December 2008, 13,500t of pre-concentrate had been produced and 10,015t had been shipped.
Kuranakh - Olekma Process Plant Site
Despite the overall delay, generally good progress was achieved on construction throughout the year notwithstanding exceptionally cold weather in the first and last quarters of 2008. Further delays were experienced due to the late delivery of the electrostatic separators but by the end of December 2008, all processing equipment had arrived at the site and was ready for installation.
Specific progress on construction during 2008 included:
* Completion of all internal frameworks including overhead bridge cranes;
* Completion of internal thermal cladding and installation of heaters; and
* Commencement of the concrete foundation platforms for equipment.
Construction and commissioning of the entire process plant is expected to be completed during H2 2009.
Infrastructure
Support Facilities
The majority of the administrative, accommodation and other associated support infrastructure was completed and in operation by the year end. Construction of the fourth accommodation block and transitional galleries between levels should be completed shortly whilst the heating and water treatment systems are operational and the site laboratory and site shop are almost complete.
Rail Connection
Completion of the assembly works associated with the rail tracks for the three site sidings and the spur line to the Baikal Amur Railway mainline is expected early in 2009.
Human Resources
Recruitment for all levels of management and operational personnel is proceeding on schedule. The human resources department made visits to various training institutes in the Amur Region and other regions as well as conducting an extensive advertising campaign both in the Russian Far East and major university cities. In addition, the Group has commenced a full management training programme to attract young graduates to the operations. At the end of 2008, the Kuranakh project had a total staff of 576 working at Kuranakh, Tynda and in the Blagoveschensk regional office.
