September 06, 2008

Ferrexpo announces USD 158 million CAPEX

Ukrainian iron ore major Ferrexpo plc announced commencement of a USD 158 million project to expand production at its current mining operation on the Gorishne Plavninskoye Lavrikovskoye deposit to approximately 32 million tonnes of iron ore per annum by 2011 and to extend the life of the mine at these production levels to at least 2035.

The Board of Ferrexpo PLC has approved USD 158 million in development capital expenditure for this project. USD 68 million will be spent on capitalized stripping works over the next 3 years, to be implemented immediately to the north of the of the current pit operations. Most of the remainder will be spent on additional mining equipment.

Mr Mike Oppenheimer CEO of Ferrexpo said that “In September we announced the initial capital commitment for the new Yeristovskoye mine, the first of our major growth projects. While moving this project and our other longer term growth options ahead on schedule, we have also been aggressively pursuing nearer term options for expanding our production to meet strong demand from our customers and to take full advantage of our under utilized processing capacity.

He said we will continue to pursue opportunities for extracting greater value from our current operations whilst not losing focus on our major growth projects.”

This additional ore production will enable the Company to take advantage of currently under utilized processing capacity to increase high quality pellet production by approximately 1.3 million tonnes per annum.