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Kuranakh, 100% owned by IRC, is the Group’s first mining operation and is the first vertically integrated titano-magnetite operation in Russia, designed, built and managed by IRC. The mine was initiated in 2010 and was moved to care and maintenance since the end of 2015 due to difficult operating environment in commodities market.

The Kuranakh Mine is located in the Amur Region of the Russian Far East, located near the town of Olekma, a principal stop on the BAM Railway. The operation covers 85km 2 and comprises the Kuranakh and Saikta open-pit mines, The operation produces an iron ore concentrate with a 62.5% Fe quality content and an ilmenite concentrate with a 48% TiO2 quality content. The concentrates are directly loaded onto railcar wagons for transportation via the BAM and Trans Siberian Railways to customers in Russia and China and internationally via the Russian Pacific sea ports.

Kuranakh — Under Care & Maintenance

As announced at the end of 2015, IRC has decided to move Kuranakh to care and maintenance due to difficult operating environment. In 2016, only limited cost and activities were recorded in order to relief the Group’s cash flow. The Group has reduced the number of staff at Kuranakh to minimum levels for equipment maintenance and security. Certain personnel have been relocated to K&S where trial production has begun. The only major non-operating cost that the site will bear is domestic property taxes however relief will be sought for these.


At Kuranakh, the LTIFR, a measure of the number of lost-time injuries per one million hours worked, was 4.80 in 2016 compared to 1.90 in 2015. The deterioration of performance is mainly due to the reduction of the number of hours worked as the mine was moved to care and maintenance.


As Kuranakh has been moved to care and maintenance status, only the first quarter of 2016 has recorded production using remaining stockpiles of ore. The production volume of the year decreased considerably. During 2016, a total of c.53,000 m3 of overburden was removed; and c.569,000 tonnes of ore was removed at Kuranakh mine. The Crushing and Screening Plant processed c.578,000 tonnes of ores. Production and sales of iron ore concentrates and ilmenite during the year amounted to c.219,000 tonnes and c.60,000 tonnes respectively. The average selling price for Kuranakh’s iron ore concentres and ilmenite were US$39 per tonne and US$117 per tonne respectively.

The table below summarises the key cash cost components of iron ore concentrate on a per ton basis:

Mining 5.4 8.8
Processing 12.3 11.4
Transportation to plant 3.8 5.7
Production overheads, site
administration and related costs
14.4 16.4
Transportation to customers 17.8 19.4
Movements in inventories and
finished goods
20.1 3.5
Contribution from sales
of ilmenite* and others
(18.8) (10.3)
Net cash cost 55.0 54.9
* net of tariff and other railway charges for ilmenite

Financial Performance

As Kuranakh has been moved to care and maintenance, the last shipments of product were completed in the second quarter of 2016. During the year, the revenue from iron ore concentrates amounted to US$8.6 million and ilmenite amounted to US$6.9 million. Due to lean operation as a result of the cost optimisation programme and weak Rouble, the unit cash costs inclusive of transportation costs remained at a low level, at US$55.0 per tonne in 2016, similar to 2015 at US$54.9 per tonne. In 2016, Kuranakh reported an improved segmental EBITDA loss before impairment of US$6.5 million, a 48.6% reduction compared to US$12.7 million in 2015.

Chemical Compositions of Kuranakh Concentrates

Iron Ore

Component Mass Fraction %
Fe total 61.0 – 62.5
TiO2 3.50 – 7.50
S ≤0.150
SiO2 ≤3.50
AI2O3 ≤5.50
P2O5 ≤0.050
Moisture Content <9%

Ilmenite (Titanium dioxide)

The Kuranakh operation also produces ilmenite concentrate with a 48% titanium dioxide (TiO2) content. Due to its brightness and high refractive index, titanium dioxide is the most commonly used white pigment. It is used in a range of applications, most notably paints and papers.

The Kuranakh product quality is held in high regard because of its consistency and low impurity levels.

Kuranakh ilmenite concentrate is perfectly suitable for production of titanium dioxide by sulphate method, sulphate titanium slag and aluminothermic ferrotitanium.

  • Stable content of concentrates across deposit
  • High degree sulfatization with sulfuric acid (>97% for grain size class of 95% -0.044mm)
  • Low content of Fe2O3, lower reductant unit consumption and load decrease at iron vitriol crystallization stage
  • Low content of chromophoric admixtures (Cr, V, Co, Ni, Cu); positively affects whiteness of pigment
  • Low content of radioactive components

Component Mass Fraction %
TiO2 48.0 – 51.0
FeO 35.0 – 40.0
Fe2O3 3.00 – 8.50
SiO2 ≤2.00
AI2O3 ≤3.00
P2O5 ≤0.050
V2O5 ≤0.150
Cr2O3 ≤0.070
Moisture Content <1.5%

Kuranakh Mineral Resources & Ore Reserves Summary

Due to low iron ore priced environment in previous years, the Group has put Kuranakh under care and maintenance since the beginning of 2016, with minimal production only during the first quarter of 2016 using remaining stockpiles. As a result, no open-pit mining activities happened during 2016. Also based on low iron ore price environment last year, the reserves of Kuranakh were proved uneconomical and were assumed to be nil.

The full Kuranakh resources are stated below:

Fe Grade
Fe Mt TiO2
Grade %
Kuranakh Pit
     Indicated 4.4 32.0% 1.4 10.2% 0.5
     Inferred 3.3 31.0% 1.0 9.92% 0.3
     Total 7.7 31.6% 2.4 10.1% 0.8
Saikta Pit
     Indicated 4.4 30.3% 1.3 9.3% 0.4
     Inferred 5.1 30.4% 1.6 9.3% 0.5
     Total 9.5 30.4% 2.9 9.3% 0.9
Total Measured
Total Indicated 8.8 31.1% 2.7 9.8% 0.9
Total Inferred 8.4 30.7% 2.6 9.6% 0.8
Total 17.2 30.9% 5.3 9.7% 1.7

Assumed average cut-off grades: Kuranakh 17% Fe.