Outokumpu to update ferrochrome production expansion project

On March 29, Finnish stainless steelmaker Outokumpu announced that it has decided to update the feasibility study on the investment to double the ferrochrome production capacity in Tornio, Finland to 530,000 metric tons. The study will include an updated financial evaluation and technical specifications with detailed budgets and timetables. The decision based on the study will be made by the end of June 2010, according to the company's statement. If realized the investment would add about 100 permanent jobs at the ferrochrome works in Tornio and at Kemi mine.
 
In June 2008, Outokumpu had announced a €420 million investment project related to ferrochrome production expansion. Due to the financial crisis and the insecure market situation the investment project was postponed in December 2008.
 
The market price of ferrochrome has started to recover since the autumn of 2009 and is expected to continue increasing mainly due to production constraints of electricity in the main ferrochrome producing country, South Africa. The production of ferrochrome is a very energy intensive process. Despite the fact that Outokumpu's production process is the most energy-efficient globally, says the company, an expansion would mean a significant increase in the group's electricity consumption and costs.
 
Commenting on the investment, CEO Juha Rantanen said, "The original ferrochrome project was very attractive. We continue to believe that there is a lot of potential for this project still today but it is greatly dependent on the future electricity price and supply in Finland. To secure our long-term cost-competitiveness, Outokumpu has a significant stake in the Fennovoima nuclear power plant initiative. The Finnish government is expected to make a decision on nuclear power projects this spring, and the decision will be taken into account as one of the factors having an impact on the ferrochrome investment."