OREANDA-NEWS. IMH (KOKS Group), the world's largest exporter of merchant pig iron and the leading producer of merchant coke in Russia, announces its operating results for the nine months ended 30 September 2014.

In the first nine months of 2014, the IMH (KOKS Group) ramped up the output of nearly all types of its products.

High efficiency of the Butovskaya mine and the Uchastok Koksoviy open-pit mine operations made it possible to further increase coal production. Coal concentrate output remained virtually flat y-o-y.

Coke production went up by 2% with premium coke grades of CSR level above 60% accounting for 15% of the total output. Coke output was driven up by growing demand for this product, which was a result of suspension of a number of Ukrainian coke plants.

Iron ore and iron ore concentrate production remained almost unchanged.

OAO Tulachermet's total pig iron production rose by 6%, with premium pig iron grades accounting for 28% of the total output. Production volumes growth was driven up by efficient operations all the way through IMH's production chain and stable operating of OAO Tulachermet at its full capacity.

Sergey Cherkaev, Vice President, Chief Financial Officer of Industrial Metallurgical Holding, commented on the first three quarters 2014 results:

"We expect very strong full year financial results. Prices for our products are stable on the back of depreciation of the rouble exchange rate and this provides improving profitability of our export operations. At the same time, we see excellent results of our production cost optimization programmes. For example, we have commissioned two power-generating units at Tulachermet after their reconstruction. This allowed us to stop purchasing electric power from third parties completely. Since October, 1 the plant sharply increased sales of the excess volumes of electric energy to the market. Another good example is our Total Production Optimisation Programme encouraging employees to come up with proposed efficiency improvement and cost saving measures. We estimate that in the next 12 months we may get 32 roubles of real cost saving effect per each rouble invested into the projects implemented within the framework of the programme. We are quite happy with the results of the programme and intend to develop it further.

We saw a large positive effect to our margins from the increasing volumes of low-phosphorus coal extraction at the Butovskaya mine. Due to this high quality coal we are able to produce low-phosphorus pig iron which is in great demand. In that way we have savings in costs by growing self-sufficiency in coal and get higher margin by producing more expensive grades of pig iron.

Our Tulachermet facilities run at their full capacity. The output volume is sold until the middle of December."