JOHANNESBURG, JUNE 26 – The Xstrata-Merafe Chrome Venture is
operating at half of its capacity as higher power costs and
mining inflation eats into margins, Merafe Resources
said on Tuesday.
Merafe, which holds a 50 percent stake in the venture with
Xstrata, said in a statement it will only be operating
eight out of twenty furnaces from June to August, South Africa’s
winter months.
“Ferrochrome production for the winter months is envisaged
to be in the region of 40 percent to 50 percent of installed
capacity,’ it said.
The ferrochrome producer in March said it struck a deal with
state-owned utility Eskom to shut seven of its furnaces until
the end of May and allow Eskom to buy back the energy that the
plants would have otherwise consumed.
These shutdowns were expected to have cost the company
130,000 tonnes of production in the first and second quarters.
The joint venture’s total ferrochrome production in 2011 was
263,000 tonnes, which represented 65 percent of installed
capacity.
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