LONDON International Ferro Metals Ltd.s (IFMs) chrome ore production fell in the fourth quarter due to lower recoveries at its SkyChrome plant during a shallow mining phase and the termination of a mining contractor agreement at its Lesedi Mine, both in South Africa.
Chrome ore production totaled 176,000 tonnes for the three months ended Dec. 31, down 35 percent year on year and 28 percent below third-quarter 2012 levels, the company said Jan. 24.
IFMs ferrochrome production fell 10 percent to 52,143 tonnes during the quarter following electrode breaks that have since been solved, the Sydney-based producer said.
The issue was caused by poor-quality electrode paste, prompting the company to source a higher-quality alternative. However, its effect on ferrochrome production was lower than initially expected, IFM said.
"We successfully limited the impact on production, which exceeded our previous guidance, and therefore the impact on sales was contained," chief executive officer Chris Jordaan said.
Sales fell 5 percent year on year to 51,092 tonnes during the quarter.
Ferrochrome spot prices started to recover from near three-year lows at the end of 2012, as low stocks and production cuts helped offset subdued stainless demand, the company said.
"This can be attributed to low stocks, aided by a combination of typically strong seasonal factors that increased costs in China, as well as the production cuts that were announced by most South African producers," IFM said. "Underlying fundamentals suggest that prices should remain at these levels throughout the quarter, with the potential to increase thereafter on the back of stainless steel demand."
The charge chrome index price published by AMM sister publication Metal Bulletin is at 94 cents per pound c.i.f. Shanghai, up from 84 cents in November.
A version of this article was first published by AMM sister publication Metal Bulletin.