Our strategy is to continually grow our output of iron ore by developing our substantial resources in a sustainable and environmentally sensitive manner whilst developing our people and allowing them to achieve their full potential. Vital to our ongoing success is that we continue to be valued as a reliable first tier supplier by our high quality global customer base.
01 Significant Resource Base
Ferrexpo’s significant resource base is situated along a single ore body, which allows for efficient expansion through brownfield developments. The FPM mine has consistent geology and allows for a long-life production profile. The development of the FYM mine fully utilises known and existing technology and infrastructure, as well as the Group’s skill base. The same principles will apply to the proposed development of the 10 million tonne concentrator facility at FYM and with regards to the development of our next open pit mine Ferrexpo Belanovo Mining (FBM).
As of 1 October 2016, we have estimated proved and probable reserves of 1.4 billion tonnes classified according to the JORC Code. These reserves are included in our estimated resources of approximately 6.6 billion tonnes classified according to the JORC Code (of which 3.6 billion tonnes are in the Indicated category resources and approximately 2.1 billion tonnes are in the Inferred category). In addition, as of 1 October 2016, we had estimated resources of 13.1 billion tonnes under the FSU Classification.
02 Cost Discipline
On a cost of production basis, Ferrexpo is a competitive cost producer of iron ore concentrate with relatively low pelletising costs on global basis. The cornerstone of the cost reduction strategy is to maximise production outputs and continually implement efficiency enhancements through the Business Improvement Programme.
03 High Quality Product
Ferrexpo produces iron ore pellets, which are a premium input used in the steel industry. Ferrexpo’s product improves blast furnace productivity in the steel production process due to its form, substance and low level of impurities. More than 90% of the Group’s products contain 65% iron content, which the market considers to be premium content, and thus commands a premium to the benchmark price.
An integrated and well-invested logistics system is an essential and a key competitive advantage for a bulk commodity producer. Ferrexpo transports its finished products by rail to border dispatch points, predominantly using its own rail cars. From the border points, means of transportation include barges and rail to customers in Eastern and Central Europe and capesize vessels, through its 49% owned port, for seaborne cargo.
Ferrexpo remains committed to long-term framework agreements with customers that are focused on producing high value added steel products. It has supplied many of its existing customers for a number of decades. The Group is focused on supplying a geographically diversified customer base and allocates a proportion of sales to potential new customers through trial spot cargoes.
The Board of Ferrexpo recognises that the highest standards of health, safety, environmental and community practices are vital to our success and are a key area of Board and management responsibility.
Over the past few years good progress has been made towards achieving best practice in Corporate and Social Responsibility and especially with regards to entrenching a culture of safety within our operations. We remain focused on continuing improvement in all aspects of CSR.
In keeping with best practice governance processes, Ferrexpo has an Executive Committee of senior managers which is responsible for overseeing the operational activities and development of the company and implementing the strategy set by the Board.
ExCo is composed of the two members of the Board, together with the heads of all business-critical departments within the Group. ExCo meets monthly.
Ferrexpo plc is fully compliant with the UK Combined Code of Corporate Governance, and has an independent Board of Directors which is responsible for setting and reviewing the strategy of the Group and approving major financial items, including the annual budget and business plan.
The Board is chaired by Michael Abrahams (Independent Non-executive) and consists of two Executive Directors and five further Non-executive Directors, four of whom are independent.
The Board meets at least four times a year.