IFM to participate in Eskom’s buy-back

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FerroChrome REUTERS A labourer works in a ferrochrome factory. Ferrochrome is mainly used as an alloy in stainless steel to prevent corrosion.

Johannesburg - Ferrochrome producer International Ferro Metals (IFM) has signed an agreement with Eskom to participate in the energy buy-back programme‚ with one furnace to be shut down for the period February 1 to March 31.

The company has production facilities in SA’s North West province.

Releasing the company’s production report for the three months ended December 2013 on Thursday‚ IFM chief executive Chris Jordaan said the agreement with Eskom enables the company to assist with SA’s electricity supply requirements and sell electricity back to the grid at a financially beneficial rate for the next two months.

In terms of the deal‚ Eskom will buy back the electricity which would have been consumed by the furnace during the two month period of the shutdown at a financially beneficial rate to the company.

The company’s contractual commitments to customers will not be affected as these will be serviced from production from the second furnace which will continue operating at full production as normal.

After the conclusion of the buy-back agreement‚ IFM expects the switching back in of the furnace to be as quick as was achieved at the end of the previous buy-back agreement in 2012.

No job losses will occur as a result of the buy-back programme and the furnace shutdowns will not significantly effect the company’s other mining and ore beneficiation operations.

Separately‚ maintenance work on the Furnace 1 taphole which was scheduled for February 1 was found to be required earlier than anticipated. The furnace was shut down on January 18 for the required taphole maintenance work and therefore will be restarted after the Eskom buy-back period.

The company reported that furnace electrode paste replacement was successfully completed over the quarter‚ limiting impact on production to a 10% fall to 52‚143 tonnes and a 5% drop in sales to 51‚092 tonnes compared to the previous quarter‚ which was better than previous guidance.

Furnace 2 reached near record production in December‚ the company noted.

“I am pleased to report that both furnaces have fully recovered from the electrode paste issue and actions taken will prevent the issue from reoccurring. We successfully limited the impact to production which exceeded our previous guidance and therefore the impact to sales was contained. At the end of the quarter‚ we were operating at full capacity with Furnace 2 producing near record production in December‚” said Jordaan.

“As we look to the next quarter‚ we see the scheduled maintenance of Furnace 1 continuing through the period of the Eskom shut down agreement which moves us into a stable period of production with Furnace 2 operating at full capacity and meeting the needs of our customer requirements. We are also confident that‚ come the conclusion of the Eskom agreement‚ Furnace 1 will switch back in as smoothly as it did last year‚” said Jordaan.

Full implementation of the company’s ongoing cost reduction initiatives through 2013 will place International Ferro Metals in a healthy position to take full advantage of recent more positive developments in the ferrochrome market and the entry into new markets such as India‚ he concluded. - I-Net Bridge



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