Johannesburg, South Africa — MININGREVIEW.COM — 14 November 2008 – Integrated ferrochrome producer International Ferro Metals Limited (IFM) – listed on the London Stock Exchange – has announced bold steps it believes it must take to meet and beat the emerging economic challenges it faces.
In its production report for the three months ended 30 September 2008, the company said it would reduce ferrochrome production by up to 40% from 1 December 2008, and would defer its capital expenditure projects. It also intended to cut costs at both operational and overhead levels. It explained that the deterioration in stainless steel and ferrochrome demand since 30 September 2008 had led to these decisions.
IFM said management believed the company was in a better position than most to respond to the current economic climate. This was mainly due to its strong balance sheet with R871 million net cash and no bank debt; low cost production; and guaranteed off-take agreements for 170 000 tonnes per annum of ferrochrome with JISCIO and CMC Cometals.
The report revealed a strong operating performance for the quarter with ferrochrome production at 59 470 tonnes, but ferrochrome sales were down to 28 025 tonnes, impacted by lower stainless steel demand.
Commenting on the September quarter production results and the outlook for the company, chief executive Stephen Turner said: “We are pleased to announce a strong operational performance. However, these challenging and volatile markets have impacted the demand for our product and we have responded prudently and swiftly to ensure the company is in the best position to weather the current storm,” he added.
“We intend to cut production and delay expansion plans until the outlook becomes less uncertain. Our belief in long-term stainless steel demand remains intact,” he emphasised, “and our expansion plans are well developed, which will allow us to respond quickly to an improvement in ferrochrome demand.”