Severstal's Russian iron ore production at 70% of capacity in Q1

Severstal is running its Russian iron ore operation at 70% of capacity for the first quarter of 2009, Severstal Resources ceo Roman Deniskin told to Metal Bulletin.

Severstal operates two iron more mines in Russia, Karelsky Okatysh and Olkon. They produced around 14 mln tn of iron ore in 2008, of which around 9 million tonnes was used within the group.

Deniskin told MB that the company has sold small amounts of iron ore, around 60,000 tn, on the domestic spot market this year, but is mostly concentrating on meeting demand from Severstal's own mills and fulfilling long-term contract obligations.

Deniskin said the spot business was done according to international prices, but didn’t specify destination. The current price of iron ore pellets is $100-110 per tn delivered China.

Severstal's flagship mill is in Cherepovets, Russia, but the company has expanded aggressively in Europe and North America.

Karelsky Okatysh produces pellets in Kostomuksha, Republic of Karelia, in the northwest of Russia, and operates four major deposits that have an estimated life of 33 years.

Olkon produces iron ore concentrate in Olenegorsk, in the Murmansk region in north-west Russia, and the deposit has an estimated life of 23 years.