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(100% owned)


The K&S Mine, 100% owned by IRC, is located in the Jewish Autonomous Region (EAO) of the Russian Far East. It is the second full-scale mining and processing operation that the Group has developed. K&S enjoys tremendous geographical advantage. The Trans Siberian Railway is linked directly to the mine site, allowing easy transport of products to customers in China. With the help of the Amur River Bridge, the transport cost and distance can be further reduced.

K&S is located in the Obluchenskoye District of the Jewish Autonomous Region (EAO) in the Russian Far East. The operation is 4 kilometres from the town of Izvestkovaya, through which the Trans Siberian Railway passes. It is also 130 kilometres from the federal highway connecting to the regional capital of Birobidzhan, and 300 kilometres from Khabarovsk, the principal city of the Russian Far East.


IRC complies with the ISO 140001: 2014 certification, a qualification which was achieved in 2012 and renewed in 2015. The K&S Mine reported an excellent safety performance for the first half of 2016. There were no injuries recorded during the year and the LTIFR was therefore zero.

At the end of June 2016, approximately 935 people were employed for the project in addition to varying contractor numbers depending upon the activities.

1H 2016 Updates

K&S is expected to be operational for commercial production in the third quarter of 2016. Since late 2015, CNEEC, K&S’s main contractor, has commenced the hot commissioning programme for the project. To date, CNEEC completed most major parts of the hot commissioning, namely the successful hot commissioning of the First Stage and Final Stage of Crushing and Screening Plant, the Onsite Railway Infrastructure that connects to the Trans- Siberian Railway.

In the past few months, CNEEC has been working hard for a fully operational K&S. In July and August 2016, the Group has commenced the 60% loading test and the 72-hour test; as well as the hot testing of railway scales, the reclaimer unit and loading unit. CNEEC has also commenced the testing of the Drying Unit, which will be necessary during winter to allow K&S to operate in all seasons.

It is noteworthy that during the hot testing, K&S has already successfully produced its first iron ore concentrates during the first half of 2016. As of 26 July 2016, the total amount of iron ore concentrates produced and stored at wet concentrate storage has accumulated to 11,672 tonnes.


The Kimkan operation covers nearly 50 km2 and comprises two key ore zones — Central and West. Open pit mining commenced at the Central area, with ore being stockpiled for processing. During the first half of 2016, no stripping and mining activities took place as the Group has already performed stripping and mining activities in the previous years. The stockpile necessary to commence operations has already built up and it is considered more prudent to preserve cash. When full commissioning approaches, the mining contractor will start preparations for mining works recommencement, firstly with drilling and blasting operations to prepare ore volumes in the open pit, and later with excavation and hauling operations to replenish ore stockpile that will be used for plant feeding. As at the end of first half of 2016, ore stockpiles totalled 5.0 million tonnes are ready for processing.


The Processing Plant is well situated between the two deposits. The plant design for Phase I is to process 10 million RoM tonnes to produce 3.2 million tonnes of iron ore concentrate with a superior 65.8% Fe grade. There is an option for a Phase 2 expansion for the Processing Plant, with the addition of ore feed from the Sutara Pit, doubling the throughput capacity to 20 million RoM tonnes, to produce 6.3 million tonnes of iron ore concentrate with a 65% Fe grade.

Production & Operating Cost Targets

During 2015, the Group has done a cost optimisation study for K&S. It is estimated that when K&S is in full capacity operation which yield premium 65.8% Fe grade iron ore concentrate to the Chinese border, the average cash cost per tonne will be US$35.4. If restating this cost per global benchmark for 62% Fe grading material and including the impact of forecast cost savings from the Amur River Bridge, the operating costs can be as low as US$28.0 per tonne.

Infrastructure and Logistics

K&S is enjoying tremendous geographical advantage because the operation is directly situated next to Trans- Siberian Railway, where IRC’s product can be transported directly to its customers in North East China. The distance from K&S operation to the Chinese border (Suifenhe) is approximately 1,500 kilometres, which translated into 10 to 14 days of transportation, much faster and consistent than other international peers. The Amur River Bridge, which is a Sino-Russian infrastructure project can further shorten the time & distance of transport of K&S and halve K&S' transport cost.

Chemical Compositions of Kimkan Iron Ore Concentrates

K&S Mineral Resources & Ore Reserves Summary