Phosphates

Oleniy Ruchey

Acron Group provides all of its own apatite concentrate, a high quality phosphate raw material used by the Group’s Russian facilities. This raw material is produced by NWPC at the Oleniy Ruchey mine in Murmansk region.

Oleniy Ruchey Deposit Reserves

Apatite-nepheline ore balance reserves under Russian standards (as of 31 December 2014)

  • Categories B+C1: 266.4 mn t (Р2О5: 43.3 mn t)
  • Category С2: 130.2 mn t (Р2О5: 19.5 mn t)

Balance reserves will ensure the operation of NWPC for 59 years.

JORC resources and reserves (2011):

  • Ore resources (measured, indicated and inferred): 280.2 mn t (Р2О5: 43.6 mn t)
  • Ore reserves (proved and probable): 255.4 mn t (Р2О5: 34.4 mn t)

2014 Operating Results

  • The Oleniy Ruchey mine produced a total of 891,000 t of apatite concentrate, up 249,000 t (39%) year-on-year.
  • Output of apatite-nepheline ore from the open-pit mine was 3.134 mn t (against 3.162 mn t in 2013).
  • In mid-2014, the Oleniy Ruchey mine reached capacity of 1 mn t of apatite concentrate per year.
  • In 2014, NWPC shipped a total of 180,000 t of apatite concentrate to third-party buyers (against 8,000 t in 2013).
  • Total CAPEX since the start of deposit development exceeds USD 800 mn.

Development Plans

  • Construction of the underground mine and expansion of the processing facility’s capacity will increase apatite concentrate output to 1.7 mtpa by 2017 and eventually to 2 mtpa.

Key Trends in the Phosphate Fertiliser Market in 2014

  • In early 2014, prices reacted to strong demand and limited supply caused by logistics issues; however, prices started to decline by spring due to increasing export from China, which reduced its export duties, and weak demand from India, where the government cut back on subsidies.
  • In summer 2014, prices recovered due to stronger seasonal demand from Brazil and the United States. Mosaic cut back on DAP production in Q4 2014, providing further support for prices.
  • According to IFA estimates, consumption of phosphates in 2014 was down 1.3% to 41.6 mn t Р2О5. IFA forecasts that consumption will gain 0.6% in 2015, mainly in India, which has low inventory, and Southeast Asia.

For more details see Fertiliser Market Overview

Operating Performance and Investments

In 2014, the Oleniy Ruchey mine extracted 8.7 mn m3 of rock, yielding 3.134 mn t of apatite-nepheline ore with an average P2O5 grade of 12.91%, against 3.162 mn t of apatite-nepheline ore with an average P2O5 grade of 14.02% in 2013. Output remained essentially unchanged, and the open pit operated at full capacity. The decrease in P2O5 grade was due to production of poorer ore.

The processing facility produced 891,000 t of apatite concentrate, against 642,000 t in the previous year. The Oleniy Ruchey mine provided all phosphates used by the Group’s Russian production facilities in 2013, and by mid-2014 it achieved an output level of 1 mtpa of apatite concentrate.

My Annual Report

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