MOLANGO

The 2009 year, the company started diamond exploration from surface, it consolidates the vision of the company regarding the certification and increase of reserves, first of the ore deposits close to current operative areas, and as an important support for the prospection of reserves in the district in a second phase. In the middle of the year the company started the regional prospection for carbonates and manganese oxides in the perimeter of the district, achieving significant progress in the geological study of the north region. The 2009 year was very atypical of operation because due to adverse market conditions the company was constantly changing production programs. However, the most significant achievement was to aim the resources of level 600, speeding up its preparation. Paving of Coyoles tunnel, including ramp VI, was one of the most decisive actions because in addition to the excellent appearance of the Underground Mine, the company was able to lower, the maintenance of vehicles used for people’s commuting with important time savings in personnel’s trips and contaminant-free river discharges. In the light of a volatile economic environment, the Mining Unit of Molango was able to meet the non-planned foreign demand of manganese nodules in the second semester of the year. Finally, it is important to underline that operation efficiencies throughout 2009, were the highest in history: 86.2% in the Crushing Plant and 96.4% in the Nodulizing Plant.

Investments were completed to maintain and renovate machinery mainly inside the mine. In the second quarter 2004, sintering equipment was acquired for the ferroalloy plant in Tamos, Veracruz, whose engineering and installation facilities would be concluded by the third quarter 2005. This investment will allow increasing company versatility to treat manganese ore, which have been nodulizated since the seventies in the Molango mining unit. In the second half of the nineties, the Company invested significant financial resources to revamp the mining equipment, consolidating a special transport system in the underground mine of Molango, starting up the exploitation of the new open pit mine of Naopa in Molango. In 1960´s, the company moved to the State of Hidalgo and began to develop the primary infrastructure to exploit the manganese carbonate deposit of Molango, now recognized as the largest in North America and one of the largest in the world.(Dec/03)