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Minerals from the sand open-pit mines
Minerals from the sand open-pit mines
Ukraine has amazing mineral resources: a country that occupies only 0.4% of terrestrial land and has about 0.8% of the planet’s population, owns 5% of the mineral raw material potential of the globe! About 20,000 deposits of over 100 types of minerals have been explored in Ukraine. Of them, 7,807 deposits of 94 types of minerals are of industrial importance.
Among the assets that bear great significance for the country, scientists list ilmenite, or titanium iron ore – a mineral of the oxides and hydroxides class. Within the boundaries of the Ukrainian shield, its fields – Irshanske, Samotkanske and Byrzulivske – were discovered in the early 1950s. The current titanium potential of Ukraine is estimated at 900 million tons of ilmenite and rutile, which corresponds to 30% of the world’s recorded reserves.
The metal of the cosmic age
Titan indeed has some great properties: it withstands the heat of up to 800 °C and cooling to almost minus 200 °C. Titanium exceeds all metals by its stability in nitric acid. In 1,000 years, corrosion penetrates deep into titanium by only 0.02 millimeters, which is why it is called the ‘eternal metal’; it does not boil and does not evaporate in a vacuum.
Titanium alloys are the strongest and they are widely used in aviation, missile technology, nuclear power engineering, automotive, railway transport, shipbuilding, sewage desalination plants, deep-water desalination plants, and super-deep drilling. Refractory glass is made from titanium and the best titanium white paint that resists the influence of alkalis and acids and is stable in the atmosphere is made from titanium dioxide. Titanium dioxide is also used for production of paper, artificial fibers, plastics, rubber products, medical and cosmetic products. It is a part of glaze, enamels, and porcelain masses. Titanium carbide is a heat-resistant material that is just as hard as diamond.
This metal is also used as an abrasive for the processing of precious stones. Artificial gems are made from it. Titanium tannic acid is much more effective than natural raw materials; it improves the quality of leather, making it more durable.
Titanium ore – ilmenite – is the main raw material for titanium (titanium sponge) and related products. The global titanium reserves are common in the form of three main industrial minerals: ilmenite, leucoxene and rutile (anatase), which are found in 30 countries. Titanium ore concentrates are used to produce titanium, titanium sponge, for smelting of ferroalloys and carbides. Rutile concentrates are used for the production of welding electrodes.
In addition to the titanium industry, TiO2 (pigment) industry is another major consumer of ilmenite concentrates, as TiO2 is one of the most important components for the production of paint and varnish materials, plastics, paper, chemical fibers, rubber, building materials and other products.
Ilmenite reserves are concentrated in Australia, China, the CIS countries (Russia, Ukraine, Kazakhstan), Norway, South Africa, Italy, India and Sierra Leone, anatase - in Brazil.
In Ukraine, the intensity of the use of ilmenite is the lowest, although we have the highest reserves: while the existing global ilmenite reserves are enough for 132 years, in Ukraine, they can serve people for almost half a millennium.
The ‘titanium’ issue
Demand for metal titanium has been recently growing steadily and, as experts forecast, will exceed the supply for at least another decade. Earlier, military industry purchased nearly 80% of produced titanium, while now, the share of the military industrial complex is only 40-50%. The rest is used in peaceful industries: chemical, oil mining and machine engineering.
In Ukraine, explored titanium reserves are attributed to great ilmenite-rutile-zircon placer deposits – Malyshevske in Dnipropetrovsk Oblast and Irshanske in Zhytomyr Oblast. By the way, our country is one of the five countries – manufacturers of strategic titanium raw materials: 20% of the global reserves and mining of ilmenite ore is concentrated on its 40 deposits, of which one is unique, 13 – large, 12 – explored and 5 – prospected. Moreover, only U.S. and China have full cycle of titanium rolled metal production, while Ukraine has all necessary conditions to complete this cycle to titanium rolled metal.
Titanium mineral raw materials are mined and processed at several companies in Ukraine. Among the most significant, promising and productive ones are two subsidiaries of PJSC United Mining and Chemical Plant – Irshansk Mining and Processing Plant (IMPP) in Zhytomyr Oblast and Vilnohirsk Mining and Metallurgical Plant (VMMP) in Dinpropetrovsk Oblast. PJSC UMCC (the company was formed as a state enterprise in August 2014, and on December 8, 2016, the company transformed into a public joint-stock company – ED) can produce around 10% of the global output of titanium ores. At that, VMMP manufactures unique within Ukraine and Eastern Europe products – rutile, zircon, kyanite-sillimanite and staurolite concentrates.
Also Zaporizhzhia Titanium Magnesium Plant (titanium sponge), OJSC SumyKhimProm (TiO2 production), CJSC Crimean Titan are involved in the titanium industry in Ukraine. Many experts are confident that Ukraine could be among the global leaders in the production of titanium, titanium products and ilmenite concentrates and TiO2. However, CJSC Crimean Titan – leading manufacturer of TiO2 in Eastern Europe, which in the past leased IMPP and VMMP for five years, is not working for Ukraine now.
Privatization as a step forward
By the way, the odious oligarch Dmytro Firtash, the owner of CJSC Crimean Titan, paid for the lease of the plants in Irshansk and Vilnohirsk UAH 9 mn per month in 2009-2014. When the companies were conveyed to the newly formed state enterprise United Mining and Chemical Plant, the country’s budget started to receive real payments: in 2016, the company paid UAH 685 mn in taxes and mandatory payments, three times more than in 2015. This put the company in the Top 100 Taxpayers in Ukraine, while Biznes publication ranked the company in the Top 5 Taxpayers in the mining industry.
Furthermore, PJSC UMCC is also among the Top 5 Dividend Payers in 2016, its payments being at UAH 321.8 mn. Last year, the company reported net income of UAH 643.7 mn, and by international financial reporting standards was ranked among Top 100 largest state enterprises in Ukraine. By its financial result, the company ranked 9th in the Top 100 Most Profitable Companies in the government sector.
“Next year, our company should be privatized,” says Acting Chairman of the Board of PJSC UMCC Oleksandr Hladushko. “We support this decision, hoping for transparent privatization and one of the key players on the titanium market acquiring the company. Only under these conditions can our companies expect productive and transparent investments. We are preparing for privatization, printing the company’s financial indicators on the company’s website. However, the more important thing is that the management system of state enterprises must be reorganized and reformed, so that the government does not interfere with operational and commercial activities of the companies. For instance, we are forced to get approval of our financial plans, and our staffing structure in corresponding government agencies. We have to deal more with officials overseeing hundreds of companies working in different areas, which is why they cannot gain insight into our production activity. And so, we spend months visiting different officials at their offices and trying to obtain different permissions and licenses. Since May 5, 2016, for instance, we had to repeatedly visit different ministries in order to obtain permits for development of land projects for allocation of three land plots on the territory of Korosten and Khoroshiv counties in Zhytomyr Oblast with the total area of 154 ha. These 150 hectares gave possibility to Irshansk plant to continue development of Mezhyrichne deposit, where the company plans to produce 19 mn t of titanium ores and obtains over 700,000 t of ilmenite concentrate. We received the permit on August 30, 2017, because, I’m sorry to say this, the officials simply did not review our documents. The validity of the documents expired again and again and we had to submit the documents again. All this takes time and by losing this time we were losing the market in a competitive environment. That is why I am confident that the state should only control the earnings of state enterprises and take the part that belongs to it. That’s all!
Hladushko tells that the company has already taken a number of important steps to be understandable and transparent for investors. Specifically, in the process of corporatization, UMCC went through a serious international audit by the company from the Top 4 and since 2016, it has been reported based on international standards that the world companies understand.
“We have two subsidiaries, producing ilmenite,” continues Hladushko. “However, the Irshansk production is, so to say, chemical, and Vilnohirsk – metal. The composition of the deposit is different and the processing is different. In order to attract more clients, we are expanding the range of services: for example, we send the client a shipment of product, trying to make sure that our ilmenite is better than, say, Norwegian and such shipment (at the client’s request) can by from 10 t for testing to 1,000 t and more. The consumers like it and they begin to work with us. So the company ends up selling its products to fulfill concrete contracts instead of putting its output in the warehouse, as it used to be before 2015.
The head of the company also said that the Ukrainian deposits of titanium-containing ores are unique, and potential consumers are aware of that, as the titanium stock market is dominated exclusively by business agreements between the two parties.
I was lucky to have a chance to visit Vilnohirsk subsidiary of the company. Its story began December 21, 1961, when the state commission put into operation a processing plant, where production of titanium and zirconium concentrates was developed. Later, production of kyanite-sillimanite, staurolite and chromite concentrates and sand for the glass industry was launched at the plant.
New workshops were launched at the processing plant almost every year: metallurgical workshop with iron-free zircon concentrate production plant was put into operation in 1962, metallurgical R&D workshop that developed new technological installation for the production of new products, including non-stick coatings and polishing pastes, a wide range of different grades of zirconium dioxide, zirconium and hafnium compounds, electrolytic hafnium powder (Germany produces optical lenses for the military from it, which we then buy for the currency, although we could’ve had our own production), concentrates and precious metals compounds in 1964.
These and other production workshops contributed to the production of unique products, which are still the hallmark of the Vilnohirsk subdivision. For instance, in the ceramic section, technologies for the production of finished products were developed, which received permits of the Healthcare Ministry of the then USSR. These are the medical instruments: scalpels, ceramic knives, dentures. The enterprise produced and sold filtering elements, nozzles for sandblasting tools, grinders for mills, and ring for mills. At the same time, the foundation for the production of zirconium sorbents, hollow spheres was laid.
In short, the company in Vilnohirsk has been working at its full capacity. It has undergone three major reconstructions that required large investments. Last year, for instance, the plant spent over UAH 110 million for upgrading its production. This made the processing plant one of the largest titanium ore processors in Europe (the Irshansk plant has been and remains the most powerful plant in Eastern Europe). The total capacity of VMMP is currently 2,500 t of ore per hour. The company processes about 4.5 mn t of raw materials per year.
They are mined in open-pit mines. By the way, I actually went down a couple dozen meters into one of them, which was put into operation in 1993. That’s Malyshevske Deposit of PJSC UMCC. Motronivskiy open-pit mine is located nearby, but it is used by Dmytro Firtash.
“Our reserves will last until 2023,” explains VMMP Chief Engineer Oleksiy Ryabinin. “That is why we are already looking for new areas. One of them – Motronivske Deposit – has the production volume of prospected reserves for 30 years, and prospective (if you turn down five villages with 5-6 houses left) – for another 150 years.
Motronivskiy Mining and Processing Plant, owned by Firtash, operates only on paper, with one thousand employees. Firtash has for several years failed to ‘finish construction’ of the processing plant, where he lured some of our people. The latter now sit at home, without pay, or work abroad in Poland and Czech Republic. There are 5 main and 3 auxiliary stations at our processing plant with around 900 employees working at it. Overall, VMMP employs around 4,000 people that provide for over 10,000 residents of the town. Every second resident of Vilnohirsk is linked with the plant.
The company trains mid-level specialists independently, while there is a real problem with highly qualified employees. It is very difficult to find a very good electrician, complains Ryabinin, since the plant can offer a salary of UAH 6,500-7,000, while in Poland he will be able to earn twice or three times as much.
Seif dunes in the middle of steppe
However, despite these problems, VMMP produces 100 tons of zirconium, 200 t of rutile, 600 t of ilmenite, as well as kyanite-sillimanite and staurolite concentrates per day. The company also produces sand after the processing of rocks in the open-pit mines. There are several types and sorts of the sand, including river sand, which is valued in the cement industry, construction, quartz sand that is used in the glass industry. Around 300 mn t of the snow-white quartz sand is stored in the open-pit mines (including processed ones).
And although quartz sand is a by-product (450 tons of it are produced every day), it is purchased in large shipments by Belarusian glass masters. Our northern neighbors produce plate glass, which Ukraine then buys from them, primarily because Ukrainian companies at best produce glass jars.
“We are working by open method,” Chief of Mining and Transport Division at VMMP Andriy Shulhan joins the conversation. “The breeding layer is removed with special equipment and stored in the so-called tailing pits. Then powerful machinery removes the empty breed and only then we get to the minerals. Our products are not charcoal: we supply sand, clay to the top, from which we separate various particles. By the way, there can be 2-12% of minerals in ore. It is beneficial to extract minerals when their content in ore varies from 5 to 7%. A new deposit was discovered on the border of Donetsk and Dnipropetrovsk oblasts, where the content of concentrates is about 27% (Demurinskiy Open-pit Mine). This, however, is rather an exception.
After ‘useful’ work in the open-pit mine is completed, VMMP employees will work on recovery of the area. Why the future tense? In nearly 2.5 years of its operation, PJSC UMCC, producing nearly 15,000 t of ore in Vilnohirsk alone, still hasn’t ‘exhausted’ licensed deposits. That is why, young forests covered recovered land on some areas only in Khoroshiv and Korosten counties in Zhytomyr Oblast.
Overall, the work in the open-pit mines in Vilnohirsk impress with its scale: for instance, I was thrilled to admire the work of a rotary digger (24-hour, by the way), with 10-meter bucket diameter and a 70-m beam. Powerful 40-47-t BILAZ trucks climb from the depth of the open-pit mine (about 70 meters), like ants (actually, they do look like ants from afar).
The company purchased the Belarusian dump trucks, using its own earnings. Before that, when VMMP was leased to Firtash, nobody could even dream about. This year, another 5 BILAZ trucks arrived to the Vilnohirsk plant, which will significantly improve the production indicators.
The raw materials travel from the open-pit mine to the processing plant by 630-mm plastic tubes. VMMP uses its third, fifth and sixth open-pit mines to produce ilmenite, rutile, zircon, while staurolite has already been washed out. You can see the while sands sparkling in the sun here. I’ve heard that Turkey would like to purchase it for its own production need (it previously purchased sand in Egypt). However, Vilnohirsk employees are currently working on technologies that could return the excavators to the sands in the future and produce more minerals from there.
By the way, VMPP uses a closed cycle of water supply: water is supplied to the open-pit mine for washing the ore, then returns with raw materials to the production facility, and from there - is dumped back. Vilnohirske deposit therefore does not pose any threat to the environment: there are no apatite, alkalis or acids. The water penetrates to a depth of 6 meters.
In addition, the plant also supplies water to Vilnohirsk, using its technical part for production needs. As for the production of ground concentrates of zircon, air is the secondary raw material, which ‘exits’ outside. Previously, the company used wet gas cleaning system with the efficiency level at only 75%. Now, the plant completely switched to dry cleaning of dust-gas mixtures with cartridge filters. The efficiency of this purification is 99%. Therefore, the air (45-60 degrees of heat), which is received at the plant after cleaning, warms the workshop during the cold season. Instead of gas!
“We are a very useful enterprise for the city,” smiles Ryabinin. “We earn currency by selling around 85% of our output abroad. But in order for the plant to operate more efficiently in the future, we require help – in the form of investment: titanium sponge is produced from ilmenite concentrate and the sponge is used for production of titanium rolled products.
Airbus and Boeing
One could say that the aircraft of the two global companies Airbus and Boeing fly one Vilnohirsk ilmenite. The spare parts of the aircraft are made of titanium rolled products. However, they are produced in Russia, which earlier purchased titanium sponge from PJSC UMCC. Ukraine also builds aircraft, but purchases titanium sheet abroad. However, the production could be organized in Zaporizhzhia. If the titanium magnesium plant there (unfortunately it is also owned by Firtash) were to consider this, Ukraine would have been able to produce about 40,000 t of titanium rolled products a year (Firtash was the one who named this figure).
“The company is naturally seeking partners all over the world in order to operate more efficiently,” sums up Acting Chairman of the Board of PJSC UMCC Oleksandr Hladushko. “This work already brought positive result: we recently signed a contract with the American DuPont to supply them with ilmenite concentrate. That is despite enormous resistance from Russia, which even organized a series of biased articles against us in order to smear our company’s reputation.”
Ideally, new productions of pigment and titanium sponge made from raw materials supplied by VMMP and IMPP will emerge in Ukraine, says Hladushko. Additional re-division will increase the value of end products by several times, which means the revenues of such companies will also increase, according to Hladushko. For instance, the average price for Irshansk ilmenite in the global markets in 2017, where Chinese manufacturers dominate, ranges from $150-220 per ton, while the global price of pigment varies within $1,800-3,000 per ton. The situation with titanium sponge is similar with the average price of ilmenite for metallurgists not exceeding $200-250 per ton, while the end product is priced at around US $10,000 per ton. The economics speaks for itself.
That is why, PJSC UMCC has made a proposal to the Ministry of Economic Development and Trade to build a new plant in Ukraine similar to Crimean Titan. Doing so requires cooperation with Skhidniy Mining and Processing Plant in Zhovti Vody, Dnipropetrovsk Oblast, which has sulfuric acid workshop. So far, there’s been no progress in this area due to the senseless variety of permits, approvals and red tape. However, we do not despair. I am confident that PJSC UMCC has a great future.