Firtash has lost control over the last ilmenite plant

Photo: Unian

On October 13 the inventory commission consisting of representatives of the Ministry of Economic Development and Trade and the State Property Fund arrived at the Irshansk Ore Enrichment Plant (OEP) to perform an inventory of its property with its subsequent signing off to the state-owned United Mining and Chemical Company (UMCC), according Head of the UMCC Ruslan Zhurylo.

No fuss

It seems that the second company leased to Dmytro Firtash’s Crimean Titan until September 5 will be returned to the state without any difficulties. “The inventory commission took up its duties on October 13. There was no resistance by the former management of the company. As such, the conflict with the former tenant is over. A new head of the company was appointed. On October 1 salaries of the employees at the Irshansk OEP were raised by 15% similarly with the salaries of employees at the Volnogorsk MMC,” said Zhurylo. However, he said that the barricades at the entrance to the enterprise erected by its workers that were awaiting its takeover have not yet been removed.

Nevertheless, according to Zhurylo, the company continues to operate and was not shut down by the former management hired by the Crimean enterprise Titan, as was the case with the Volnogorsk Mining and Metallurgical Complex the day before the inventory.

Representatives of Group DF did not comment on whether they would litigate the inventory at the Irshansk OEP, as was the case with the Volnogorsk MMC. As a reminder, the inventory commission entered the aforementioned enterprise in late September by force. Judging by the reaction of Group DF, the loss of the Volnogorsk MMC was more painful for the company – it filed a lawsuit complaining of the illegality of the inventory procedures.

All except Crimean Titan

Zhurylo says the UMCC’s plans for provision of ilmenite feedstock remain unchanged. As a matter of priority it will be provided to domestic processors regardless of their ownership structure – the state-owned Sumykhimprom and the Zaporizhzhya Titanium and Magnesium Works (49% owned by Firtash’s Tolexis Trading). It is quite probable that the UMCC will not refuse to supply ilmenite to Russia’s VSMPO-Avisma.

Only Firtash’s Crimean Titan will be provided with the raw materials from own company Group DF, which controls the Mezhdurechensk OEP and Valki-Ilmenit. These companies also specialize in production and processing of ilmenite ore.

Competitors sustain losses

While the UMCC’s management loyal to Privat is establishing control over titanium OEPs, the staff at the competitive enterprise extracting ilmenite sands in the Kirovohrad oblast is trying to put out the fire. CEO at the Velta Open Pit and Processing Plant in Kirovohrad Andriy Brodskiy said last week one of the company’s factories producing titanium concentrate was damaged by fire. Its capacities provided up to 60% of the total output of the plant, or nominally 150,000 – 180,000 t of ilmenite concentrate a year. “We did not suspend production. The second factory is still operating, and we intend to load it until completion of reconstruction of the damaged facility,” said Brodskiy.

Velta’s CEO does not rule out the possibility of arson, but refrains from drawing any premature conclusions as to whether somebody is interested in putting the factory out of order. “Law enforcers should draw the conclusions,” said Brodskiy.

No place in China

When asked whether he feels the current increased competition on the domestic ilmenite market from UMCC, Brodskiy gave a negative response. He also added that as of 2015 Velta decided to minimize its presence on the Chinese market, which has been the main client for its products up until now. According to the Khimkuryer Agency, based on the results of 6 months in 2014 the company supplied 20,000 t of products to China, 17,000 t to the Czech Republic, approximately 3,000 t to Korea and close to 1,000 t to Belgium. “We will reorient supplies to the domestic market and increase our presence in the EU, North America and other directions,” said Brodsky.

He said that over the past 1.5 years there has been a serious decline in the price of the product on the Chinese market. For the same reason, namely the weakness of the market, Velta still has not sped up its own project for processing of ilmenite into products with higher value added.

Brodskiy did not provide any detailed information about customers that Velta found on domestic and other markets, though he noted that the use of ilmenite produced by the company is more appropriate in metallurgy than in chemistry. The average content of concentrate in a ton of ore mined by the company is 56%, said Brodsky. In his opinion such a high content of a useful substance in raw material stipulates its use for metallurgical purposes.

Ilmenite concentrate is used for the manufacture of chemical products, such as titanium dioxide and iron and steel products, such as titanium sponge, alloys, rolled metal and pipes. Titanium is used for chemical purposes by Crimean Titan and Sumykhimprom and for metallurgical purposes by the Zaporizhzhya Titanium and Magnesium Works (manufactures sponge and bars), as well as the Russian company Avisma – VSMPO Titan Ukraine LLC, which produces titanium pipes.