RUSTENBURG (miningweekly.com) − The Xstrata-Merafe joint venture (JV) aims to increase output at the Boshoek ferrochrome smelter complex near Rustenburg by between between 10% and 12% by 2012, operations manager Francois de Wet said on Tuesday.

The plant currently produces about 240 000 t/y of ferrochrome, which would increase to about 260 000 t/y by the fourth quarter of next year, on the back of an optimisation strategy.

Output from the Boshoek complex will be around 200 000 t/y by the end of this year, because of temporary furnace closures.

The furnace will start up on September 1 after being temporarily closed during the winter season owing to higher Eskom electricity prices.

Xstrata-Merafe chrome division MD Deon Dreyer said cost pressures were being felt throughout the mining sector, with rising power tariffs a significant challenge.

“We’re asking for a level playfield to stay competitive,” he added, noting that Eskom, as a State-owned entity, should not be about profit making.

Dreyer said that Eskom had to ensure that electricity prices, which more or less doubled in real terms between 2008 and 2011, had to be sustainable.

On Tuesday, the Energy Intensive User Group, which represents Eskom’s high-intensity energy consumers, warned that power prices were approaching an affordability “tipping point”. The group said that smelters would become increasingly unattractive unless interventions were made to moderate the price path.

Dreyer said that the Xstrata-Merafe JV would seek to mitigate the effects of higher electricity prices by driving efficiencies through technology at new operations.

In 2002/3, the company achieved 4 MW an hour per ton of production. In 2011, it was 3.15 MW an hour per ton, while it was expected to ease to 3.10 MW an hour per ton in future.

General works manager Francois Coetzee said it was crucial for the South African government to protect the ferrochrome industry, as strong growth of between 5% and 6% a year was expected.

“Long-term demand for ferrochrome will be strong as China continues to expand, and the Xstrata-Merafe JV will retain its advantage as a low-cost producer and as the largest ferrochrome producer in the world,” he added.

The company has allocated a capital investment of R8.3-billion between 2005 and 2013.
 

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