Johannesburg, South Africa — MININGREVIEW.COM — 27 October 2008 – African Rainbow Minerals Limited – a major producer of platinum, chrome and nickel in South Africa – has announced that it is closing two ferrochrome furnaces in the country as a result of weakening demand.
Announcing this here, the company said significant adverse changes in the dynamics of the global economy had led to a downturn cycle in most economic sectors. “For ARM the most significant immediate impact is the sudden decline in demand for its products in the spot commodity markets, more specifically the demand for ferrochrome and chrome ores,” it explained in a statement. “This change in demand has necessitated a review of the production schedules of Assmang’s chrome division and Nkomati chrome operations” it added, “and to achieve the necessary reduction in volume the following actions have been taken:
Assmang – which is jointly controlled by ARM (50%) and Assore Limited (50%) – has switched-out two of its ferrochrome furnaces at the Machadodorp works until demand recovers. Dwarsrivier will continue mining and review the situation on an ongoing basis.
Nkomati expects to reduce chrome ore and concentrate sales, will continue mining the chrome as part of the pre-stripping of the pits for the Nkomati Nickel large scale expansion, and will stockpile the chrome ore. Nkomati Nickel and Chrome mine is jointly controlled by ARM (50%) and Norilsk Nickel (50%).
The statement added that ARM, together with its partners, would review the situation on all operations on an ongoing basis, taking cognisance of the uncertain market conditions.
ARM chief executive officer Andre Wilkens commented: “Under these uncertain times, the fittest company will come out strongest and see the opportunities. ARM still views the longer term growth prospects for the commodity market as strong. With the exception of chrome, production at ARM’s existing operations and expansion projects will remain unaffected,” he added. “We continue to focus aggressively on the cost competitiveness of our operations and cautious capital investment.”