JOHANNESBURG - London-listed International Ferro Metals (IFM) was currently engaging with State-owned power utility Eskom regarding its potential participation inside an electricity buy-back programme.
CEO Chris Jordaan told Mining Weekly Online how the ferrochrome producer was thinking about the financial impact of taking part in the programme, adding that this market could be informed each final decision was made.
He stressed which the initiative, as well as a 25% electricity price hike scheduled for April, could reduce ferrochrome supply to the market and upward pressure on pricing.
Yesterday, the Xstrata-Merafe chrome venture announced who's would assist Eskom by temporarily closing five of the company's furnaces. Frequently, Eskom would buy-back the force not consumed by these five furnaces until May 31.
Jordaan said cost benefits continued to be attention point for the company, with initiatives arrived across its smelting and mining operations.
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“We are track to achieve our cost reduction targets, having achieved 27% of targeted production financial savings and we are saved to track to strike the target of 76c/lb in 2011 financial year production costs inside current financial year,” he noted.
Jordaan added how the modification of the company’s cogeneration plant would improve its energy efficiency by providing about 11% of the total energy requirements while in full production. Four outside of ten cogeneration plant engines were currently operating at design capacity, while Engine 1 was successfully changed into operate at higher hydrogen levels.
Rolling around in its interim financial results report with the six months ending December, the company’s production costs was down by 10 c/lb, mainly because of the furnace shutdowns for the roof-rebuilt project and increased utilization of cheaper reductant.
The company stated how the rebuilt project had also impacted production, which slumped to 85 779 t, a 15% fall compared to the 2010 corresponding period.
Lower production volumes led to a loss before tax of R139-million, compared with a loss of R160-million with the comparative period plus a loss of R54-million in the last half.
However, despite IFM’s ferrochrome sales visiting 3% year-on-year to 100 318 t inside reporting period, it showed a 21% growth from first half results.
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Ore sales volumes grew by 35% to 156 983 t, when compared to previous corresponding period, but was down 9% from that recorded within the prior half.
The company’s net loss after tax narrowed 14% to R92.1-million from R107-million the previous year. It posted a loss of 16.4 c a share.
OPERATIONAL REVIEW
The construction and commissioning by mining house Anglo Platinum from the UG2 chrome tailings re-treatment plant was completed and also the first consignment was expected this month.
Meanwhile, production at IFM’s Sky Chrome mine from the North West province, which were only available in June, was being ramped up as outlined by plan, Jordaan said.
“IFL has seen genuine operational achievements over the half year, for example the successful realization the furnace roof rebuild on time, on budget and operating at a at availabilities in excess of 98%,” he commented.
OUTLOOK
Jordaan pointed out that stronger sales reflected the company’s success in embedding a diversified usage across numerous regions, including in East Asia and United states.
“The combination of solid operations, crusher plant for sale active marketing to some broader variety of customers and price savings should place IFM in a very healthy position for taking full advantage of the robust long-term outlook for metal,” he stated.
Amidst electricity price pressures and low inventory levels, the effectiveness of the rand led to Jordaan’s optimistic outlook to the year ahead. “Despite challenges, the ferrochrome market shows recovery and now we expect ore sales to enhance,” he noted.
Tags: IFM Engaging With Eskom On Possible Power Buy-back Options
