Assmang to Cut Manganese, Chrome Output on Steelmaking Slump
bloomberg.com
By Ron Derby
May 22 (Bloomberg) -- Assmang Ltd., South Africa’s second- largest manganese producer, will cut output at all of its operations after demand for steelmaking raw materials plunged.
“It’s clear we need to cut output at all our operations and avoid unnecessary build-up of stock,” Jan Steenkamp, an executive director at the company, said in an interview in Johannesburg today. Assmang will review the market at the year- end, he said.
Global steel production slumped 24 percent in April compared with a year earlier, according to the World Steel Association, as demand from automakers and construction dropped. Assmang’s ferromanganese is used to harden steel, while its chrome makes steel corrosion-resistant.
“There’s still a lot of uncertainty in the market,” said, Steenkamp, who is also chief executive of the ferrous division of African Rainbow Minerals Ltd., which owns half of Assmang.
Assmang’s Cato Ridge operation will run at 60 percent of capacity, with only the Nos. 1, 2 and 6 ferromanganese furnaces operating, Steenkamp said. The No. 5 high-carbon ferromanganese furnace at the plant was shut April 7, following the closure of the No. 3 and No. 4 units.
The Chislehurston-based company’s two so-called charge- chrome furnaces at the Machadodorp Works will stop production in either June or July, leaving all four units at the site shut, Steenkamp said.
“For three months, all furnaces may be off,” he said.
Job losses are expected at Machadodorp and Cato Ridge, and talks with unions have begun, Steenkamp added.
Iron Ore Boost
Assmang will increase iron ore output because of its Khumani project in Cape Province, he said. The mine will produce at an annual rate of 6.5 million metric tons by June 30, the end of the fiscal year.
“It has a design capacity of 10 million tons, but that will depend on the market,” Steenkamp said. The iron ore operations “are still profitable.”
African Rainbow rose 1 cents to 125.01 rand at 11:58 a.m. in Johannesburg trading. South Africa’s Assore Ltd., which owns the other half of Assmang, dropped 10 rand, or 2 percent, to 470 rand.
To contact the reporter on this story: Ron Derby in Johannesburg at rderby1@bloomberg.net
Last Updated: May 22, 2009 06:38 EDT |
