Merafe Resources said on Monday that ferrochrome production at the Xstrata-Merafe Chrome joint venture for the year ended December 2009 fell by 30 percent compared to the previous year.
Output was 203,000 metric tonnes in the year ended December 31 2009, compared with 290,000 metric tonnes in 2008.
The company said in a statement to shareholders that the fall was a result of the suspension of up to 80 percent of production capacity in late 2008 and early 2009 in response to the rapid decline in market conditions.
Production has been progressively increased from 20 percent of annual capacity in early January to approximately 85 percent by year end as demand for ferrochrome from the world’s steelmakers improved.
Merafe stated that the strengthening of the Rand against the US Dollar exerted pressure on margins and together with improving demand, enabled ferrochrome producers to achieve a 30 percent increase in the ferrochrome price from $0.79 (R6) per pound in the first quarter of 2009 to $1.03 per pound in the fourth quarter of 2009. It attributed the loss to low ferrochrome prices and a strong rand.
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