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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (31339)	1/18/2009 11:19:22 AM
From: LoneClone	Read Replies (1) \| Respond to of 195792

Xstrata-Merafe cuts ferrochrome production by 80 percent on soft market The latest cut comes after an assessment of markets in Europe and the Far East, but the joint venture is not cutting jobs yet. Author: Tessa Kruger Posted: Friday , 16 Jan 2009 JOHANNESBURG - mineweb.net The Xstrata-Merafe Chrome Venture has suspended another six of its ferrochrome furnaces, leaving only three of 20 furnaces and 20% of annual operating capacity running on the basis of soft demand in Europe and the Far East. Spokesperson for Xstrata Alloys Songezo Zibi said today the company had assessed demand again at the beginning of the year and took the decision to suspend more furnaces on this basis. However, the venture would not retrench workers as a result of the shutdowns at this stage as they would need their scarce, skilled staff when the economic scenario turns around. Zibi said the company was able to retain the staff "for as long as possible" as furnaces were much less people intensive than mines. Xstrata also had the advantage of using Premus technology at some of its furnaces that enabled it to make a 30-35% power saving at every furnace using it. The company has effectively now switched off all its furnaces with high power consumption and only have those using Premus technology running. This meant that total suspended ferrochrome production capacity now amounted to 1.37m tonnes - 80% of annual operating capacity. The company first suspended eleven furnaces at the beginning of December. Zibi said the venture planned to bring maintenance scheduled for May to July forward, while the furnaces were still temporarily suspended. The maintenance work was normally done on a rolling basis. "If things change in the medium term, we would be able to start up the furnaces again quickly,' he said. Xstrata Alloys, a business unit of Xstrata PLC, listed on the London and Swiss stock exchanges, is one of the largest South African producers of ferrochrome and vanadium. The unit, Xstrata Alloys, contributed about 4% of the group's total revenue in 2007. It made a revenue contribution of just over $1.2bn in the first six months of last year, up from $589m in the same period in 2007. This came as the group's total revenue in the first six months of last year was $16bn. The division once contributed about 50% of the group's revenue, but this fell to a single digit in 2007 as a result of the acquisitions Xstrata made. Commenting on the financial crises' impact on mining companies in general, Zibi said that a 4% drop in China's economic growth had a big impact and would reverse many mining companies' growth plans.