Milling operations

 

Milling operations

The Company decided to produce and sell milled rock to industrial customers (manufacturing plants) as raw material to produce end user fertilisers and to local Kazakhstan agricultural producers as direct application fertiliser called Direct Application Rock (“DAR”) in order to generate early cash flow.DAR is a simple and cheap, but effective, type of fertiliser which can be applied to increase output and quality of the crop yields.

In order to produce DAR the 17% P2O5 beneficiated rock (concentrate) must be milled to a size of flour on Milling and Loading Complex (“MLC”).


The Company officially commissioned the first of two lines of its MLC at the Chilisai site on December 21, 2010. The plant has received all official approvals and passed authorities’ inspections, and the Deed of Commissioning, the approval required to run an industrial installation in Kazakhstan, has been duly executed (RNS 24/12/10).

The Company officially started industrial scale production of DAR at its MLC on March 15, 2011.Currently the MLC consist of two identical milling lines with a capacity of 20 tonnes per hour each.

 

The two silos have a total storage capacity of 1,250 tonnes of phosphate flour. Up to 30 rail cars can be accommodated on the MLC’s loading terminal which links, via the Company’s recently completed rail spur, to the main state railroad (RNS 07/04/11).


The Company’s MLC/DAR project has been included in the Kazakhstan’s State Support Programme for Accelerated Development (the “Programme”), a major Government support initiative in the country. The potential benefits of participation the Programme may include tax reduction, lower customs duties, fast-track document turn over with local and central Kazakhstan authorities and additional infrastructural grants dedicated to the Project. The Project has a goal to increase food security of the country.