Young and technological: 15 years of Ferrexpo Yeristovo Mining

Ferrexpo Yeristovo Mining in Poltava region is a fundamentally new enterprise built during the independence of Ukraine

Mining and processing enterprises are important to the Ukrainian economy. Before the war, their combined contribution to the country’s GDP, was 3.1%. Five years ago, in 2018, the products of iron and steel plants accounted for 6.1% of domestic exports, and almost 50,000 people were employed in the iron ore industry alone.

The youngest Ukrainian mining and processing enterprise is Ferrexpo Yeristovo Mining (FYM) of the Ferrexpo iron ore company. On July 14, 2023, the company celebrated its 15th anniversary. Since its inception, FYM has been recognised for the use of best practice mining and some of the best equipment in the industry. Despite the war, FYM continues to work and supply products to its customers, and plans are already being made for a post-war future.

Advanced from the start

Ferrexpo Yeristovo Mining (FYM), located in the Poltava region is the first successful project of such a type, implemented during the time of independent Ukraine. In 2008, the management of Ferrexpo decided to create a fundamentally new enterprise. Its industrial and administrative buildings were built taking into account the latest technologies. The industrial development of the deposit and the extraction of iron ore was operational by 2012 – a mere four years.

One of the main factors relied on from the beginning was the use of modern mining equipment from some of the world’s leading manufacturers. The first mining equipment – a CAT 16M wheel grader and two Caterpillar CAT D10T crawler bulldozers – FYM received already in October 2008. In December of the same year, the first stripping operations were started at the enterprise with the involvement of the ESH-11/70 walking excavator.

With the increase in production volumes, the fleet of mining equipment was replenished. In May 2011, the Bucyrus RH-200 hydraulic excavator , the only one in Europe, was launched, within a year the enterprise launched the second giant hydraulic excavator – Bucyrus RH340 and a fleet of 220 t Caterpillar 793D haul trucks.

Currently, the enterprise operates Caterpillar, Komatsu and Hitachi brand equipment. In particular, these are unique 34- and 29-cubic-meter excavators, 220-ton haul trucks, which are not so common even in Europe.

FYM has modern maintenance divisions – Mining Equipment Maintenance Department and In-pit Maintenance Department, which service all Ferrexpo industrial equipment. In 2021, the enterprise purchased equipment for the repair of haul trucks (equipment for replacing rear axles), which is no longer available anywhere in Ukraine. If earlier certain spare parts were replaced within a day, now it is possible in just a few hours.

Impact of war

The full-scale invasion by the Russian Federation had a significant impact on the operation of the Ukrainian mining and metallurgical industry, posing complex problems – notably the disruption of logistics chains, shortage of personnel and interruptions in the supply of electricity.

In the first few months, FYM continued to operate as normal, later slowing down mined and processing activities. In October 2022, FYM, like the rest of the Ferrexpo, was temporarily idle due to regional energy infrastructure damage following Russian missile attacks. The company rearranged its activities to ensure one pit could continue to operate employing a quarter of available equipment capacity.

The war necessitated the company to become nimble and adapt to change.

«During 2023, we have been able to gradually increase production capacity, notably with a second pelletizing line being recommissioned. This has allowed us to effectively double output», said Taras Zinchenko, Acting General Director of FYM.

At the same time, the team at FYM are working to speed up the turnaround time for wagons, thereby improving delivery time of iron ore pellets to its end customers. FYM, and indeed the Ukrainian iron ores industry as a whole, would benefit significantly if access to Ukraine’s Black Sea ports could be restored. This would give the opportunity to restore overall production, and supply overseas customers at lower costs. In turn, this would generate more income for Ukraine, and support more investment in the near-term.

The full-scale invasion by Russian also presented Ferrexpo Group with a staffing challenges, notably because some employees in specialist fields went abroad, and indeed, almost 700 employees across Ferrexpo (including many FYM employees), joined the ranks of the Armed Forces. In general, these are representatives of critical professions – repairmen, electric-gas welders and drivers. The business is continuing to support its workforce that are serving in the armed forces helps mobilized employees and is in constant contact with them.

Smart solution

The youngest iron ore business in Ukraine is also the most technological advanced in the industry – «the first unmanned», as the press dubbed it. Smart solutions implemented by Ferrexpo are new to Ukrainian industry, established with the goal to compete on an equal footing with the world’s largest iron ore companies.

In April 2019, FYM started a project to convert and modernize PitViper 275 drilling rigs. Currently, the enterprise operates three rigs that are remotely controlled by drill operators. In particular, machines are able to perform a number of functions without human participation at all, as well as achieve maximum drilling accuracy, increase the cost and efficiency of drilling operations.

A year later, a single control center was opened – the «brain center» of the operation, which allows real-time monitoring of mining equipment in both pits, prompt response to probable deviations in the operation of the equipment and better planning of the process of stripping operations and iron ore mining.

In 2021, the first in Ukraine Private Networks e-LTE worth $1 million was built at FYM. This sum also included the cost of the license. This technology is very similar to that used by mobile communication providers; the main difference being that this network is owned by Ferrexpo, built as a communications infrastructure to manage the unmanned mining equipment fleet.

Last year, the enterprise also modernized six CAT 793D haul trucks – they were equipped with an American-made ASI automated remote-control system. However, due to the Russian invasion the project using unmanned haul trucks in production has been temporarily suspended. One of the reasons is the inability to deliver the necessary materials, spare parts and equipment on time. However, some equipment is being stored ready for the restart of the project.

Post-war plans

FYM continues to be an important player, for the communities where it operates, the region and Ukraine. In many senses FYM is playing its part to support the economy, whilst also providing humanitarian support through 70 different social projects and initiatives.

Last year, FYM produced 9131 thousand tonnes of iron ore, contributing to Ferrexpo’s overall annual production of 6.1 million tonnes. Even after Russia’s full-scale invasion and under martial law conditions, the business continues to operate, and has adapted its operations to make some cost improvements. Supplies to customers have reduced, with a focus on customers in Central-Eastern Europe for now, whereas previously, before the war, they were shipped globally to customers in Asia, the Middle East and North America.

The Russian invasion has resulted in some investments being temporarily paused. In the longer term, as the business restores production, it will be an important player in the reconstruction of Ukraine. In particular, FYM plans to work more actively on the implementation of projects aimed at reducing carbon emissions, reducing the use of diesel fuel and switching haul trucks to electric drive and intelligent dispatching systems for remote operated electric haul trucks to ensure that the business remains at the forefront of technological advances and continues to operate as a modern Ukrainian mining company.

«The plans for the near future are simple – to reach the maximum production capacity and preserve the team. Also, that the mobilized employees, who are currently defending Ukraine, return alive, healthy and continue to work at our enterprise», – said Taras Zinchenko.