International Ferro Metals
The IFL chromite mine and adjoining ferrochrome processing operations are situated at Buffelsfontein in South Africa's Bushveld complex, 100 kilometres north-west of Johannesburg. SRK advise that IFL's production costs fall within the lowest quartile of all ferrochrome producers.
The Company intends to expand its current operations with the construction of three additional 66MVA furnaces and ancillary plant. IFL's production capacity is expected to increase by 150 per cent. to 665,000 tpa.
International Ferro Metals plans to cut production, delay expansion plans until outlook becomes clearer
International Ferro Metals Ltd said the deterioration in stainless steel and ferrochrome demand since the end of September has led to its decision to reduce ferrochrome production by up to 40 percent from December 1 2008 to about 12,000 tonnes per month and to defer its capital expenditure projects.
Chief executive Stephen Turner said: “These challenging and volatile markets have impacted the demand for our product and we have responded prudently and swiftly to ensure the company is in the best position to weather the current storm.
“We intend to cut production and delay expansion plans until the outlook becomes less uncertain. Our belief in long term stainless steel demand remains intact and our expansion plans are well developed which will allow the company to respond quickly to an improvement in ferrochrome demand,” he added.
For the three months to end-September, the company reported a strong operating performance, with ferrochrome production at 59,470 tonnes, while sales were 28,025 tonnes over the period, impacted by lower stainless steel demand.
International Ferro Metals considers itself to be in a better position than most to respond to the current economic conditions, citing its strong balance sheet with ZAR871 million net cash and no bank debt and guaranteed offtake agreements for 170,000 tonnes per annum of ferrochrome with JISCIO and CMC Cometals.
The projects that will be deferred are the ore beneficiation plant, and the pelletising and sintering projects along with the construction of additional furnaces. The expansion of mining production will also be deferred.
In addition, executive chairman Tony Grey and CEO Turner have announced that they will step down from their current executive roles to non executive positions with effect from December 31 2008. Grey will become non-executive chairman and Turner will become his deputy, while David Kovarsky, the current managing director, will be promoted to CEO.
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Other International Ferro Metals news
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25/11/08 International Ferro Metals Suspends Ferrochrome Production Due to Falling Demand
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14/11/07 International Ferro Metals sees margins squeezed