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.
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