core sector communique

United States Ambassador to Visit Ferrexpo Yeristovo Mining

Today, 31 May 2012, the US Ambassador to Ukraine, John Tefft, is to visit Ferrexpo’s Yeristovo Mine (FYM) in Poltava Administrative Region. This visit has been organised in recognition of the significant partnership Ferrexpo has forged with Zeppelin Ukraine, Caterpillar Global Mining and US Export-Import Bank, the US credit finance agency, and to celebrate several milestone events in the development of FYM.

Commenting on the visit, The Ambassador, said “The mutually beneficial trade relationship among Ferrexpo, Zeppelin Ukraine, Caterpillar and the US Export-Import Bank is an example of how business cooperation between U.S. and Ukrainian companies can work well. There are no losers here. We would like to see even more such mutually beneficial relationships in the future.”

Kostyantin Zhevago, Ferrexpo’s Chief Executive Officer, added “Ferrexpo’s strategy is to invest in world-class mining equipment, bringing global mining technology to Ukraine. We have built strong relationships with the very best suppliers in the world, including Zeppelin here in Ukraine and our investment is supported by long-term loans from US Export-Import Bank. As a result, we have some of the best and most modern technology working across our mining operations and will soon have a world-class component rebuild facility on site to support our activities. I am delighted to welcome Ambassador Tefft to FYM to show him the progress we are making in the development of our new mine and to celebrate the strength of the relationship we have forged with Zeppelin, Caterpillar and US Export-Import Bank.”

Ferrexpo’s relationship with Zeppelin Ukraine is now 10 years old, having started with the delivery of Ferrexpo’s first CAT 988F Front End Loader for use in its Poltava mine in 2002. Through continued investment, the fleet now comprises 125 pieces of equipment operating across both its mines, valued at more than US$200m.

Today, Ferrexpo will unveil its new CAT 6060 Shovel, the first and largest of its kind to arrive in Ukraine and the biggest hydraulic face shovel to be placed into service at either of the two Ferrexpo sites. Its mining fleet has also been expanded with the acquisition of 10 CAT 793D haul trucks, which started operating at FYM late last year. These are the largest Caterpillar mining trucks to operate in Ukraine and can carry 220 metric tonnes of material per load. These acquisitions have been supported by long-term credit guarantee finance provided by US Export-Import Bank. Additional credit has been approved for a further eight 785C mining trucks, 11 bulldozers and one grader which will arrive on site shortly.

Zeppelin Ukraine (with the support of their parent company Zeppelin GmbH in Germany) will strengthen its close working relationship with the Ferrexpo Group further, by building a state of the art component rebuild centre on site at Yeristovo, to cost approximately US$7.5m. This facility has been designed in conjunction with the Caterpillar Global Mining Engineering Team and will allow Zeppelin to increase their service and support capabilities to Ferrexpo. It will employ around 40 skilled specialists and administrative staff.

The location for the new facility was chosen in recognition of the strength of the relationship between Ferrexpo and Zeppelin Ukraine and will reduce the need to ship mining equipment components elsewhere for repair and overhaul. The 2651m² building will incorporate a rebuild workshop, warehouse, administrative-building and engineering room under one roof as well as 550m² of additional undercover storage for large parts and components. Zeppelin Ukraine has leased a 9,000m² plot of land from Ferrexpo, and construction will start in June, 2012. The works will last around 11 months, and the facility is expected to open in May 2013.

Summing up Kostyantin Zhevago added, “In partnership with our suppliers, we are focused on developing a world-class mining operation here in the heart of Ukraine. Ferrexpo delivers valuable economic benefits through our long-term commitment and investment in the Poltava Region. This is good for our business, good for the region, but most of all, good for Ukraine.”