Kazakhstan-based mining group Eurasian Natural Resources Corporation Plc. (ENRC) has announced that despite economic difficulties in 2009 its production levels recovered progressively, mainly as a result of the continuing demand for commodities from China, and due to the strengthening of prices.
Production cutbacks in the company's ferroalloys and iron ore divisions announced in Q4 2008 mainly impacted the production performance in H1 2009. However, by the end of September 2009, production in these divisions had broadly returned to full effective capacity levels in the producer's Kazakh operations.
Accordingly, in 2009 ENRC's total ferroalloy production went down by 6.8 percent year on year to 1.446 million mt, with a decrease of 2.9 percent year on year for ferrochrome (1.161 million mt) but an increase of 12.2 percent year on year for ferrosilicomanganese (165,000 mt). Production in ENRC's ferroalloys division was adversely affected by the much reduced demand for medium and low carbon ferrochrome, caused by the economic slowdown, particularly due to dependence on the automotive, engineering steel and capital project sectors.
Meanwhile, ENRC's total extraction of iron ore in 2009 went down by three percent year on year to 36.604 million mt, which is nonetheless a better result than was expected at the beginning of 2009. The capacity utilization of ENRC's iron ore division in 2009 was 84 percent, compared to 86 percent in 2008. In response to recovering demand in both the Russian and Chinese markets, primary iron ore concentrate production increased through 2009. This enabled the ENRC to limit its production decline to 1.9 percent, producing 15.197 million mt of primary concentrate.
In addition, in 2009, ENRC's saleable concentrate production increased by nine percent year on year to 8.541 million mt, but there was a significant decline in its saleable pellet production of 11.1 percent year on year to 6.182 million mt. The change in the mix of production reflected the demand, with customers switching to less expensive concentrate in H1 2009; however, pellet recovered in H2 2009. As a result, the total annual saleable products (concentrate and pellet) volume in 2009 was broadly similar to 2008, i.e., 14.7 million mt.