Moscow - PhosAgro (MICEX-RTS, LSE: PHOR) ("the Company"), a leading global vertically integrated phosphate-based fertilizer producer, announces that the planned 2012 capital expenditure budget for Apatit is RUB 6,990 million (excl. VAT).
The 2012 investment program for Apatit was approved on 30 December 2011 by the management board of PhosAgro AG, which acts as the management company for Apatit. This investment program is intended to support the maintenance and development of Apatit’s resource base, beneficiation capacities and production infrastructure. The program is expected to result in higher production capacities, greater efficiency, as well as improved industrial, environmental and fire safety.
Construction of new mining capacity to increase apatite-nepheline ore extraction at Kirovsky and Rasvumchorrsky mines.
Planned investments into the development of the Kirovsky mine in 2012 will focus on underground and surface complexes for Mineshaft #2. This shaft is expected to start production in 2015, and to increase the mine’s total capacity by two million tonnes of ore per annum (the equivalent of approximately 600 kt of apatite concentrate), for a total of more than 14 million tonnes of ore per annum. Construction of the +90 metres and +170 metres levels, as well as the underground crushing unit #2 will also continue.
Technical upgrades to Apatite-Nepheline Beneficiation Plants #2 and #3 (ANOF-2 and ANOF-3) to increase apatite concentrate production efficiency.
In 2012 Apatit plans to invest in projects using cutting edge engineering solutions and high-output equipment in areas like crushing and classification of apatite-nepheline ores, with the goal of decreasing production costs.
As part of the full-scale modernization program at ANOF-2, Apatit plans to upgrade the thickening and filtration processing units. At ANOF-3 several investment projects are underway, including: upgrades to automated production systems at the turbo compressor station and in the reagents unit; installation of high-frequency screens for the classification system in the ore crushing cycle (expected reduction in electricity consumption of up to 38 mln kWh per year).
Implementation of safer emulsion explosives system in underground mines (2011-2013).
The major part of the work on implementing an emulsion explosives system is planned for 2012. This includes purchasing and installing equipment to enable mechanical arming of emulsion explosives in the Kirovsky and Rasvumchorrsky mines. This investment program is intended to reduce costs related to the post-detonation processing of oversized materials, as well as to significantly increase the safety of blasting work.
Development of transportation infrastructure and expansion of own rolling stock for transportation of apatite-nepheline concentrate.
Apatit plans to obtain new hopper cars and to conduct comprehensive maintenance of the intra-plant railways as part of its 2012-2016 five-year program. In addition, planned upgrades to the mining fleet dispatch system are designed to improve efficiency by decreasing idling time, fuel consumption and rubber use.
Planning and surveying, scientific research and design engineering for further development of the resource base.
In addition to the construction and modernization of mining and beneficiation capacities, PhosAgro and Apatit plan to work towards achieving the full potential of apatite-nepheline ore by increasing the production of nepheline concentrate and developing technology for the extraction of rare earth elements.
Apatit plans to finance its capital expenditure program with its own cash as well as borrowings.