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IRC is a vertically integrated
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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.


The LTIFR is a measure of the number of lost-time injuries per one million hours worked. The K&S Mine reported a good safety performance for 2018 with no incidents recorded during the year and the LTIFR was reduced to 0 (31 December 2017 LTIFR: 1.0). In order to reduce possibility of the reoccurrence of similar accidents in the future, the Company took proactive steps in examining the implementation of the industrial safety management system, and will improve the system where necessary.

K&S Flowsheet

FY 2018 Updates

During 2018, K&S is in the commercial production stage while it continues to ramp up to higher production capacity. During the year, numerous ramp up tests were carried out – K&S plant has proved to be capable of operating at load, having successfully operated at 105% of designed capacity during 24-hour run. Towards the end of year, K&S' production capacity was affected by problems at the Drying Unit, due to poor quality workmanship by the contractors to the K&S project. While the K&S site team continued to resolve the issues identified, the need for the Drying Unit as part of the K&S production process will gradually be reduced over the first quarter in 2019 as the winter weather subsides.


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. In 2018, the mining contractor commenced the mining works and started to increase the mining scale for continuous production of K&S. The process of drilling and blasting followed by excavating and hauling of the open pit continues to replenish the stockpiles which are used for plant feeding. During the year, a total of 358,550 meters were drilled, 9,868,450 cubic meters were blasted and 7,985,600 tonnes of ore were mined.


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 produce 6.3 million tonnes of iron ore concentrate with a 65% Fe grade.

K&S Unit Cash Cost

In view of the fact that K&S has not yet reached full production capacity, the unit cash cost per tonne in 2018 amounting to US$50.2 per tonne has not yet reached its optimal level. Taking into account the potential Rouble depreciation to previous lows and the opening of the Amur River Bridge in 2019 which would reduce transportation costs, the Group considers that K&S' cash cost is expected to remain near US$43 per tonne when full scale operation at K&S is achieved.

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 1,000 kilometres, which translated into 7 to 10 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

Component Mass Fraction % Component Mass Fraction %
Fe total 65.8 Na2O 0.10
Fe2O3 64.2 K2O 0.09
FeO 26.9 Cr2O3 0.05
SiO2 5.96 S 0.036
AI2O3 0.67 V2O5 0.028
MgO 0.67 Cu <0.010
CaO 0.50 Zn <0.010
MnO 0.41 Pb <0.010
TiO2 0.29 Ni <0.010
P2O5 0.10 Cd <0.005
1 <0.10 Co <0.005

It is anticipated that this superior product could earn a premium due to its quality and the logistical advantages of supplying customers in the North East of China from the Far East of Russia.

K&S Mineral Resources & Ore Reserves Summary

Fe Grade
Fe Mt
Kimkan & Sutara
     Measured 20.6 31.4% 6.5
     Indicated 367.5 32.7% 120.1
     Inferred 281.6 32.0% 90.21
     Total 669.7 32.4% 216.8
     Inferred 179.4 27.6% 49.5
     Total 179.4 27.6% 49.5
Total Measured 20.6 31.6% 6.5
Total Indicated 367.5 32.7% 120.1
Total Inferred 461.0 30.3% 139.7
Total 849.1 31.4% 266.3
Kimkan & Sutara
Total Proven 21.2 30.0% 6.4
Total Probable 339.5 31.7% 107.5
Total 360.7 31.6% 113.9
Assumed average cut-off grades: Kimkan & Sutara Pit Fe magnetite cut-off grade: 15%; Kostenginskoye Pit Fe magnetite cut-off grade: 10%. For the Sutara Pit, in the previous year, Fe total was used as the basis of determination while in 2018, Fe magnetite is used. The change in the basis is to allow the adoption of a more consistent approach in determining the Resources and Reserves figures for the pits in Kimkan, Sutara and Kostenginskoye.