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To: LoneClone who wrote (36625)	5/6/2009 10:10:11 AM
From: LoneClone	Read Replies (1) \| Respond to of 195744

Xstrata-Merafe ferrochrome production 76% down on last year miningweekly.com By: Martin Creamer 5th May 2009 JOHANNESBURG (miningweekly.com) – The first-quarter ferrochrome production of the Xstrata-Merafe chrome venture was 76% lower than for the same period in 2008, the JSE-listed Merafe Resources said on Tuesday. Merafe’s attributable production for the quarter was 19 000 t of ferrochrome, compared with 79 000 t for the same period the year before. The indicative published price for the output was US 79 c/lb, compared to US 121 c/lb for the same period in 2008. Merafe, headed by CEO Steve Phiri, said that 17 of the chrome venture’s 20 furnaces, equivalent to some 80% of annual production capacity, was suspended during the first quarter as destocking continued in response to weak demand. The European benchmark price has since fallen 10 c US/lb below the Q1 price of 79 c US/lb. Reuters reports that the global ferrochrome industry has slashed output by around two-thirds in recent months in response to slumping demand. Reuters adds that most producers in South Africa -- the world's biggest producer of ferrochrome, used in stainless steel to prevent corrosion -- have cut production back sharply. “We don’t see the price falling below the current US69 c/lb,” Phiri reiterated to Mining Weekly Online. Despite the 80% production cutback, the company was continuing to hold on to retain its full complement of 6 000 permanent employees. “We are biting hard, but still holding,” Phiri told Mining Weekly Online. He sees improvement in sight towards the end of the third quarter and the beginning of fourth-quarter of 2009. Merafe generated R540-million in cash in the 2008 year, but visibility remains short. “We’re working day to day. We are seeing some signs of recovery in the East, all be they small, and we hope they are long-lasting,” he said. “We have a variety of different products and we are running out of some of them, and then we replenish those stocks. But it’s more about replenishing than going full blast.” The three smelters out of the company’s 20 smelters that were continuing to produce were the three lowest-cost smelters, in the Lydenburg and Steelpoort area, which made use of the advanced Premus technology.