— It is a hard enough time for the uranium market today — the prices are not at the highest level. How did ARMZ finish 2014?

— The last year was difficult, but we managed to solve all problems that we set for ourselves and subsidiary enterprises. Our efforts were aimed to bring PPGKhO (Argun Industrial Mining and Chemical Association, the largest in Russia and one of the largest uranium-mining enterprises in the world) to a break-even level of operation. A complex of measures was implemented, including implementation of technological innovations and perfection of the production base, as well as measures aimed to optimize costs, personnel capacity, to increase labour productivity. For the first time in recent years we managed to lower by 6% the level prime cost of produced uranium. We have essentially reduced the volume of purchases — we only buy what there is a overriding need for, we optimized the warehouse stocks. These measures have allowed to save about 1.9 billion roubles.

— How was 2014 for ARMZ subsidiaries, and what are they facing this year?

— Sustained effort was spent at “Khiagda” (subsidiary enterprise in Buryatiya, performs test mining of uranium using downhole in situ leaching method). Main and power buildings were commissioned; construction of vitriol plant is almost complete. We will commission the plant in September. This will allow increasing uranium production from 400 to 1000 t. Production prime cost will decrease at once, and we will reach the world level of prime cost. We created a present-day production in “Dalur” (the enterprise is located in Dalmatovsky area of the Kurgan region). Uranium mined there has practically the same prime cost as the cheap uranium mined in Kazakhstan. We currently work on improvement of production quality. We installed a drying machine, which allows receiving yellow cake that complies with international standards.

— Did the forecast verify for 2014 on uranium production at all ARMZ enterprises?

— Production parameters remain today at the level of tasks set by the state corporation. We plan to redistribute the production level throughout enterprises. First of all, we will gradually reduce PPGHO volumes. But we will increase the production level at “Khiagda” and “Dalur”, therefore we will be able to produce the necessary amount of uranium when using this scheme.

— ARMZ is mastering a deposit in Novaya Zemlya. Is the project progressing according to plan?

— Pavlovskoe is one of the largest lead and zinc deposits in the world. We started to make the first essential steps there in 2013–2014. Geological prospecting works are now complete. In first half of this year we will know the percentage of zinc, lead and silver content. At the moment we are looking for marketing outlets in Russia and abroad. In particular, we are engaged in negotiations with Swedes. Logistics is very convenient for them — delivery by direct ship cruises. This year we shall develop the feasibility report, on which basis the northernmost mining enterprise will be designed and constructed in Russia with the capacity of 2.5 million t/year. It is planned to start commercial development in 2019.

— What about implementation of new technologies?

— New technological concepts are important for us the same way as getting break-even. We have increased almost by 25% the budget of ARMZ innovative development program in comparison with the last year, having realized about 300 million roubles in 2014. The main objective is to improve production and to lower the prime cost of uranium mining. We approached large-scale contracts with the leading scientific organizations of the industry. We actively support projects at the enterprises. Mineral separation of off-balance piles at PPGKhO is an example. 7 million ton of ore mass with the extremely low content of metal have accumulated at the site during the last 45 years. Mineral separation complex helps to extract from raw materials the commercial ore with very low prime cost. We receive additional finished products using heap leaching method. Total economic benefit can make 100 million roubles per year. Launch of the new processing method allowing reduction of the oxidizer (manganese dioxide) consumption from 6 to 3 kg per ton of ore was a breakthrough. Preparation was started to implement the ore processing technological procedure using X-ray enrichment method. It will also allow essential reduction of costs. We also have pilot projects of our experts. So, Vitaly Mityashov, the leading power engineer of PPGKhO, proposed a new technology that allows reducing pressure air supply and electric power consumption in mines. At year’s end it will allow saving more than 20 million roubles. Implementation of mining-and-geological computer 3D-technologies is ongoing at “Dalure”, which will allow increasing the accuracy of reserves calculation, design quality of operational units and the efficiency of Dalmatovsky and Hohlovsky uranium deposit development. The expected annual economic benefit is 43.3 million roubles.

— Engineering centre is created on the basis of ARMZ “VNIPIpromtechnologiy” subsidiary; please, specify the intermediate results of this work.

— Besides the traditional projects in the field of uranium mining and RAW processing the enterprise intends to specialize on construction and building of industrial facilities on a turn-key basis. Construction of a finished products drying complex at “Dalur” site is a pilot project. Due to innovative solutions the yellow cake humidity was reduced from 30% down to 1.5% according to the world quality standard. It is planned to use the technologies after their testing at “Khiagda” as well.