FXPO Ferrexpo Plc

    RNS Number : 5220Z
  Ferrexpo PLC
  22 July 2008
   

    
    22 July 2008
    Ferrexpo plc

    Production for Q2 2008

   Production in Tonnes '000       Q2       Q1     Change    Q2     Change    YTD       YTD     Change
                                  2008     2008      %      2007      %       2008      2007      %
 Iron Ore                        7,229.9  7,131.5   1.4    7,305.8  (1.0)   14,361.3  14,446.0  (0.6)
 Concentrate                     2,744.9  2,695.0   1.9    2,667.9   2.9    5,439.9   5,293.1    2.8 
 Pellets from produced raw       2,271.7  2,232.7   1.7    2,232.8   1.7    4,504.4   4,450.1    1.2 
 materials
             62% Fe              1,304.7  1,279.4   2.0    1,268.4   2.9    2,584.1   2,672.6   (3.3)
             65% Fe               967.0    953.3    1.4     964.4    0.3    1,920.3   1,777.5    8.0 
 Pellets Total                   2,328.1  2,268.2   2.6    2,324.2   0.2    4,596.3   4,652.8   (1.2)
             62% Fe              1,361.1  1,314.9   3.5    1,359.8   0.1    2,676.0   2,875.3   (6.9)
             65% Fe               967.0    953.3    1.4     964.4    0.3    1,920.3   1,777.5    8.0 

    Highlights

    *     Production in Q2 2008 on target, with increased output of pellets and proportion of higher grade (65% Fe) pellets
    *     Total pellet output in Q2 2008 increased by 2.6% compared to Q1 2008
    *     Production of pellets from own raw materials increased by 1.7% compared to Q1 2008
    *     Selective mining increased rich ore extracted in H1 2008 by 5.4% versus the equivalent period in 2007 and reduced total ore
extracted
    *     Extraction of richer ore yielded an additional 2.8% concentrate in the first six months of 2008, and 8% more 65% Fe pellets in the
same period
    *     Stripping volumes increased by 12% in H1 2008 compared to H1 2007, underpinning future iron ore production growth
    *     Third party concentrate purchases remained low in Q2 2008 due to market tightness; focus remains on pellet production from own raw
materials
    *     Sharp increases in diesel and steel production input prices in line with international commodity price increases have increased
costs in H1 2008
    *     Ukrainian PPI cost inflation for the six months to 30 June 2008 amounted to 29.4%
    *     Significant cost pressures partially mitigated by continuing operational efficiency improvements
    *     Average achieved price on a DAF/FOB basis for Q2 2008 rose by 92.6% compared to Q1 2008
    *     Project to expand and extend existing operations continued on schedule and within budget


    Viktor Lotous, Chief Operating Officer of Ferrexpo, stated: 

    "In the second quarter of 2008, we commissioned several items of new mining equipment which have enabled the Group to step up the
extraction of rich ore from our existing mining operations. This growth in rich ore has resulted in an 8% increase in the amount of higher
grade 65% Fe pellets produced in the first six months of 2008 enabling us to meet our product quality improvement objectives. At the same
time, stripping operations at our GPL expansion project have positively impacted our overall stripping volumes, helping to expose the
necessary iron ore for the next phase of production. This project continues to proceed as planned. Although Ukrainian inflation remains high
and we have continued to experience sharply rising costs associated with diesel and steel inputs in the second quarter, we are pleased that
these cost pressures have been partly mitigated by continuing successes in operational efficiency improvement at our GPL operations."


    For further information, please contact:

 Ferrexpo:                           +44 207 389 8304
 Gavin Mackay
 Finsbury:                           +44 207 251 3801
 Robin Walker 
 Alex Simmons
 Ferrexpo Poltava Mining (Ukraine):   +38 053 4874390
 Alexander Dovgalev

    Notes to Editors:

    Ferrexpo is a Swiss headquartered resources company with assets in Ukraine, principally involved in the production and export of iron
ore pellets, used in producing steel. Current output is over 9 million tonnes, approximately 85% of which is exported to steelmakers around
the world. The Group is currently undertaking a significant growth programme and is listed on the main market of the London Stock Exchange
under the ticker FXPO. For further information please visit www.ferrexpo.com.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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