International Ferro Metals Reports Ferrochrome Production Unaffected

on Oct 15, 2012

International Ferro Metals (LON:IFL) said that it had sufficient supplies to meet its ore demands, Mining Journal reported on 15 October 2012. The ferrochrome producer will have to use ore from its own operations, with the ongoing strike in South Africa negatively affecting Anglo American Platinum’s (PINK:AGPPY) delivery obligations to its chrome customers.

**IFL to Use Chrome from Its Own Operations**
In a press release, IFL noted that its ferrochrome production has not been affected by the lack of supply from Anglo American Platinum’s Waterval operations. On September 12, the UG2 Chrome Recovery Plant at Anglo American Platinum’s Waterval operations in Rustenburg was shut down due to ongoing strike action at the Waterval Concentrator, on which the chrome recovery plant is directly reliant.

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.

Under the current supply agreement with Anglo American Platinum, IFL is entitled to the first 15,000 tonnes of metallurgical concentrate production per month from the UG2 plant. In September, IFL received only 13,400 tonnes, whereas in October, IFL has not yet received any UG2 ore. Although the UG2 ore comprises 30 percent of IFL’s demand, the company reported that output was neither affected nor was expected to be. IFL notes that it has sufficient ore supplies from its own operations as well as from other sources and is therefore not reliant on UG2.

**Rising Costs**
!m[Anglo American Platinum’s Chrome Recovery Plant Shuts Down](/uploads/story/579/thumbs/pic1_inline.png)And while output will probably remain unchanged, IFL noted that an additional input cost was likely as a result of not receiving the 15,000 tonnes of UG2 concentrate. The company management, however, did not expect the added cost to input to be significant to overall production costs.

In its press release, IFL also confirmed that the strike activity in the transport sector had not affected supply commitments to customers.
**South African Strike Affects Anglo Platinum’s Delivery Obligations **
On October 12, Anglo American Platinum reported that the labour unrest which has already significantly affected South Africa’s platinum production capacity would also have a negative impact on the company’s delivery obligations. As a result, Anglo Platinum issued force majeure notices to its chrome customers such as IFL. The company, however, reported that its ability to deliver platinum group metals (PGMs) and base metals remained unaffected.

In its press release, Anglo American Platinum confirmed that as a result of the illegal industrial action of its employees and the initial safety suspension, total lost platinum production has amounted to 67,000 ounces, or an average loss of 3,800 ounces per day.
**Latest Pay Offer Refused**
On October 15, Mineweb reported that striking gold miners in South Africa refused the industry’s latest pay raise, dampening hopes that the labour unrest would end anytime soon. “The unions have indicated that there have been mixed reactions by their members to the Chamber’s proposals, and that they are unable to confirm a return to work,” South Africa’s Chamber of Mines said in a statement as quoted by Mineweb.
The Chamber also said that the industry was unable to make additional proposals and companies in the sector would explore other avenues to stabilise the industry.


Want easy-to-follow crypto, forex & stock trading signals? Make trading simple by copying our team of pro-traders. Consistent results. Sign-up today at Invezz Signals.

Learn more
Commodity Mining Precious Metals Stock Market