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Annual report<br />
4.4 Transportation<br />
between mines<br />
We incur these costs in transporting ore<br />
by rail from Mine 4 to Plant 3, which does<br />
not have an adjoining mine. These costs<br />
include railway tariff and corresponding<br />
shunting operations. in <strong>2007</strong> they increased<br />
by 76% compared to 2006 due<br />
to an increase in volume of transported<br />
ore, and an increase in the railway tariff.<br />
These costs will be eliminated following<br />
the start of ust-Yava operations.<br />
05<br />
General<br />
and administrative<br />
(G&A) expenses<br />
General and administrative<br />
costs, <strong>2007</strong><br />
<strong>2007</strong><br />
Effective railway tariff, RUR<br />
per tonne<br />
+11%<br />
35<br />
38<br />
2006 <strong>2007</strong><br />
Average cash general and administrative<br />
expenses 1 per tonne increased in <strong>2007</strong> by<br />
53% compared to 2006 and were RuR<br />
637 (uS$ 25) per tonne. The increase was<br />
mainly explained by one-off expenses relating<br />
to our share offering, and new post<br />
employment benefits. Without these expenses<br />
average cash G&A per tonne in<br />
<strong>2007</strong> would have been RuR 452 (uS$<br />
18) per tonne, an increase of 8% on their<br />
2006 level, which is in line with the inflation<br />
rate.<br />
The largest components of our general<br />
and administrative expenses are labour<br />
costs, costs related to the shares offering,<br />
consulting, insurance and security costs.<br />
other 19%<br />
labour 35%<br />
Security 5%<br />
insurance 6%<br />
consulting 6%<br />
New post employment<br />
benefits 5%<br />
Expenses related to<br />
shares offering 24%<br />
50<br />
25<br />
0<br />
Volume of ore transported,<br />
thousands tonnes<br />
+41%<br />
4748<br />
6688<br />
2006 <strong>2007</strong><br />
5.1 labour costs<br />
FiNANciAl MANAGEMENT<br />
DiScuSSioN AND ANAlYSiS<br />
SEcTioN<br />
labour costs include all kind of wages<br />
and bonuses, and related social taxes for<br />
administrative personnel and senior management.<br />
in <strong>2007</strong> the average monthly<br />
payroll for managerial and administrative<br />
personnel increased by 13% compared to<br />
2006, at RuR 31,200 (app. uS$ 1,220).<br />
5.2 New<br />
post-employment<br />
benefit plans<br />
in <strong>2007</strong> we signed a new collective Bargaining<br />
Agreement with our employees<br />
for a three-year term, which introduced<br />
several post-employment benefits for<br />
employees and pensioners. These plans<br />
provide for payment of retirement benefits<br />
starting from the statutory retirement<br />
age, which is currently 55 for women and<br />
60 for men (a quarterly payment from<br />
RuR 250 to 600 depending on the length<br />
of service), payment of a lump-sum benefit<br />
upon death of current employees and<br />
pensioners (RuR 5,000) and a lump-sum<br />
payment upon retirement (equivalent to<br />
1 cASH GENERAl AND ADMiNiSTRATiVE<br />
expenses — General and administrative expenses<br />
less depreciation and amortization.<br />
8<br />
4<br />
0<br />
36
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