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VSMPO-AVISMA will continue to cooperate with the GOK Volnogorsk

2 June 2015

Volnogorskiy GOK, Ukraine, has always been the main supplier of ilmenite for VSMPO-Avisma. To date, the parties have managed to preserve business relationships. In 2014 Volnogorskiy mine changed hands. Now the plant belongs to the United State Mining and Chemical Company of Ukraine. Agreement for the supply of ilmenite have been renegotiated. In the future, the volume can be increased. Experts believe that the dependence on each other's companies is very high, because in the extension of the cooperation is not surprising. According to Mikhail Voevodin, the co-owner and General Director of VSMPO-Avisma, one-year contract signed between the companies. The first deliveries of ilmenite, a raw material for production of titanium, will begin in June. The exact amount of the supply is not covered. However, Mikhail Voevodin says that volumes will be sufficient for implementation of the program in 2015.

Previously — until September of last year — and Irshansky Volnogorskiy factories have been rented, «Crimean Titan» Dmitry Firtash. Their delivery is almost 100% of the demand on the part of Avisma. Ukrainian government did not extend the lease, so that mining companies have moved to OGHK. VSMPO-Avisma, while the difference is not felt as a contract concluded with a manager competent plants.

VSMPO-Avisma annually consumes about 120 000 tonnes of ilmenite. This year, in addition to the supply of raw materials Volnogorsk plant will be carried out by Australian companies. Also ilmenite will be purchased at the Ukrainian private mining companies. In Avisma plans also include Volchansk field development in the Dnipropetrovsk region in 2016. The initial annual capacity of the plant is estimated at 20,000 tonnes of ilmenite concentrate. By 2021 it is expected to increase to the level of 50 000 tonnes. VSMPO-Avisma Experts believe that the Ukrainian power increase is possible in the past. However, it is necessary to take into account the cost of ilmenite — perhaps a third-party purchase will prove more beneficial. Currently Avisma warehouses contain about 60 000 tons of ilmenite. In the case of the stability of Ukrainian supply is possible to increase the volume of purchases.

Experts say that, depending on the supply of raw materials and the quality of the region's cost of ilmenite is about 150−250 USD / ton. Renegotiation of the contract and for Avisma, and Volnogorsk GOK is a solution optimal. For Russian companies other suppliers would have cost no more expensive example. Ukrainian company is to find a buyer on such a large volume would be too easy.

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