Letter from the Founder

Details

Published on Friday, 10 June 2011 08:15

Having worked with the global steel industry for over 30 years securing blast furnace feedstock for production, I have an understanding of the challenges large scale producers of processed metals face. While working with steel mills worldwide I was constantly engaged with the task of securing economically viable supplies of iron ore, thermal coal, manganese, chromium and vanadium. The economies of scale in steel processing are vast and for the significant capital expenditure needed for a steel production facility, a guaranteed supply chain is essential to major producers.

The job of securing steel feedstock was challenging enough through the 1980’s and 1990’s, but with significant economic growth in countries such as China and India, steel companies around the world have entered a new era of competitiveness. With demand for both iron ore and coal at high levels, we now see many steel companies securing mining operations for them in a bid to secure consistent product over a long time-line. However, bringing such huge capital assets as working mines onto the balance sheet is not necessarily the most attractive option for a company whose core business is, fundamentally, manufacturing.

In the last seven years I have created a company that can provide the steel industry with a reputable independent supply partner. At Zamin Ferrous we have a high class team capable of operating, developing and identifying large-scale iron ore, manganese and coal mines. At Zamin we are building a portfolio of assets, thus guaranteeing our long-term ability to supply high tonnages of iron ore, manganese and coal, year on year, to different customers around the world.

Zamin’s first major project was the Bamin project in Bahia, Brazil. A bankable feasibility study was completed in January 2010 showing 2.4 billion tonnes of JORC resources and planned production of 19.5 million tonnes of blast furnace and direct reduction pellet feed.

ENRC, the FTSE 100 Kazakh financial company, purchased a 50% stake in Bamin in May 2008 and provided a substantial financing commitment to the project. In September 2010 ENRC purchased Zamin's remaining 50% stake in the project for US$735 million marking a new phase in Zamin's development.

Capitalizing on the expertise and knowledge base at Zamin we can build an iron ore production portfolio that can command a premium per ton of iron ore over a single asset producer.

The philosophy of partnership also extends to the countries we work in. We want to be a long- term force for economic and environmental good in the countries we operate in. Zamin is going to put down strong roots in South America and elsewhere not just for the next five years, but for the next generations by building relationships with national and state governments through employment, infrastructure improvements and by enforcing the highest standards of environmental compliance.

Thank you for your support

Pramod Agarwal

Founder

Zamin Ferrous