Xstrata Alloys, a part of Swiss mining group Xstrata Plc, and its South African JV partner Merafe Resources have announced further reductions in ferrochrome production in response to short-term weakness in demand following a close review of recent market conditions.
As previously reported by SteelOrbis, in early November, the venture had announced the temporary suspension of six furnaces, representing 500,000 mt of annual ferrochrome production - equal to approximately 29 percent of the Xstrata-Merafe Chrome Venture's total available capacity.
According to the new decision, a further five furnaces have now been suspended, representing approximately 406,000 mt of annual ferrochrome production capacity and reducing 2008 ferrochrome production by a further 50,000 mt. Therefore, the total suspended capacity has now reached 906,000 mt - equal to 52 percent of annual operating capacity of Xstrata-Merafe Chrome Venture.
In the scope of output reduction, a total of one furnace at Boshoek, four furnaces at Rustenburg, three furnaces at Lydenburg and three furnaces at Wonderkop will remain suspended until market conditions improve.
The Xstrata-Merafe Chrome Venture, however, will continue to monitor prevailing market conditions closely and no lay-offs are anticipated for permanent employees at the furnaces, enabling the venture to return capacity quickly and efficiently when market conditions allow.