UZTM-KARTEX and Erdenet Mining Corporation Sign a Long-term Cooperation Agreement

22 May 2019

UK UZTM-KARTEX and Erdenet Mining Corporation have signed a long-term cooperation agreement providing for the supply of machinery and arranging the joint production of spare parts and assemblies for mining equipment at the machine-building facilities of the Mongolian company.

The document, signed in May by the general director of UZTM-KARTEX, Mr. Yan Center, and director of Erdenet, Mr. Hoohor Badamsuren, says, "this memorandum has been concluded to establish long-term and mutually beneficial cooperation and business partnership between the parties in the field of supply of excavating machinery, crushing and milling equipment, and spare parts made by IZ-KARTEX and Uralmashplant."

In addition to the direct supplies of machinery, the agreement also provides for the organization of joint production of a number of types of spare parts and assemblies for UZTM-KARTEX-made equipment at the "Repair and mechanical plant" (RMZ, owned by Erdenet company). "For us, it is an important stage of development of relations between our companies," says Hoohor Badamsuren, "we plan further developments in the field of machinery-building and we are going to use these products for the development of our production facilities and provide them for other companies as well. It is the aim of our development strategy, and the organization of joint production with our Russian partner, development of professional skills, exchange of experience and technology will allow us to move to a new level."

According to the commercial director of UZTM-KARTEX, Mr. Andrey Ganin, the joint production of spare parts organized at RMZ plant is a mutually beneficial form of cooperation between the equipment supplier and the customer. "We plan to develop the cooperation with Mongolian companies, and the localization of production makes it possible to optimize logistics expenses for the supply of spares and assemblies of equipment, and also to ensure the required level of quality of service for our machinery that is, of course, a very important competitive advantage," told us Mr. Ganin.

The first contract for the direct supply of EKG-12K power shovel made by IZ-KARTEX was signed in the end of the previous year, and the second contract – in the early 2019. One machine has already been commissioned at the Erdenet mine, and the supply of the second machine is planned for July.

Erdenet Mining Corporation is the largest Mongolian state-owned company working in the field of mining and processing copper-molybdenum ore. Average annual output of the company is 35 (mining) and 26 (processing) million tons of ore, and 550 tons of concentrate which is supplied to China, Japan, Korea, and Russia. Until the year 2016 Erdenet was a joint Mongolian and Russian company with respective shares of 51% and 49%, and two years ago Russia has withdrawn from the shareholders.

UK UZTM-KARTEX was created in 2015. It is an association of the largest Russian manufacturers of mining equipment: Uralmashplant JSC, Ekaterinburg, IZ-KARTEX named after P. G. Korobkov, St.-Petersburg, and OMZ Foundry LLC which is providing the machine-building companies with heavy and large castings. The main shareholder of all three members of the association is Gazprombank.

"Uralmashplant" JSC (UZTM) founded in July 1933 is one of the leaders among the manufacturers of equipment for mining, metallurgy, construction-materials and power-engineering industries. The main products manufactured by the enterprise include crushing and grinding equipment (crushers and grinding mills of various sizes), rope shovels, hydraulic excavators and walking draglines of various types and modifications, heavy overhead cranes, metallurgical presses, accessories and tools for them, and mine hoists. The Company's development strategy aims to launch machine-building lines that would be capable of providing end-to-end solutions to the mining and metallurgical industry to achieve their production targets using equipment manufactured by UZTM and other Russian producers. "Uralmashplant" JSC, supported by its strategic partner Gazprombank, implements an investment program that provides for a large-scale upgrade of the Company's machining and welding facilities, digitalization of production processes.

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