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IFM cuts down on expansion plans

Part of IFM’s
ferrochrome production
facilities in the
North-West province
Johannesburg, South Africa — MININGREVIEW.COM — 28 September 2010 – International Ferro Metals (IFM) “’ an integrated ferrochrome producer listed on the London Stock Exchange, headquartered in Australia and with production facilities in South Africa “’ has pulled back on its expansion plans because of depressed conditions in the ferrochrome markets.

Company CEO David Kovarsky said in his review for the year to end-June that the feasibility study started in 2008 to look at commissioning three new furnaces had been amended to consider the potential commissioning of up to two new furnaces. The study is expected to be finalised by the beginning of 2011.

“The feasibility study is then expected to be put to the Board by June 2011 at which time a decision on the expansion should be made,” Kovarsky added. “With the Medupi power station commissioning expected late in 2012, it is likely that expanded electricity supply will be granted by Eskom around that time,” he said.

IFM managed to reduce its losses for the year to end-June to R157 million, compared to a loss of R456 million in the previous financial year, as revenues nearly doubled to R1.4 billion from R782 million in the previous year.

Kovarsky pointed out that international stainless steel production had since bounced back from 25.4Mt, with 2010 global output expected to hit a record level of 30.8Mt. Ferrochrome production was expected to reach a matching record level of 8.3Mt “’ up from 6.7Mt. .

He emphasised that IFM was strongly focused on reducing production costs at the mine and the plant, and on reducing general corporate overheads. “Moreover, if the furnace expansion plans are approved this will allow the company to reduce its average cost of production by utilising technologies that yield lower costs,” said Kovarsky.