Johannesburg, South Africa — MININGREVIEW.COM — 03 December 2008 – BHP Billiton Limited – the world’s largest mining company – has announced that it is temporarily cutting manganese production at its 60 %-owned Samancor (Pty) Ltd operation due to weak market conditions.
A company announcement here today said the cuts were expected to reduce ore production by 21 % and alloy production by 23% for the 2009 financial year.
The announcement added that the reduction in manganese ore output was expected to be balanced between GEMCO (Australia) and Hotazel (South Africa). Resources at both these operations would shift to development and re-building product inventories, which were severely depleted. The reductions were expected to reduce ore production by 1.5 million tonnes in FY2009. Samancor’s current total output capacity was 7.0 million tonnes of ore per annum.
“In relation to alloy, furnace rebuilds will be brought forward at TEMCO (Australia) and Metalloys (South Africa),” the statement continued. In addition, certain of these furnaces are not expected to restart until market conditions improve. We expect to reduce alloy production by 170 000 tonnes in FY2009, from a current output capacity of 725 000 tonnes per year.
BHP Billiton chief executive, Ferrous and Coal, Marcus Randolph, commented: "We said on 22 November that global market conditions were proving challenging for the steel industry and its raw materials providers. Manganese ore and alloy are entirely dependent on the carbon steel industry, and are therefore directly impacted by the current weak steel markets,” he added.
“We will continue to monitor the situation and when we see a recovery, given we are bringing forward essential major maintenance projects, we expect to be well placed to restart our full production alloy capacity,” said Randolph. “In ore, the development activities and rebuilding of depleted stocks will also allow us to react quickly to any recovery in the market," he concluded.