JOHANNESBURG (miningweekly.com) – The Xstrata-Merafe chrome joint venture’s production increased by 48% year-on-year in 2010, in response to a market recovery and improved ferrochrome demand.

The companies on Tuesday announced that the average operating capacity utilisation rate rose to 74% of installed capacity in 2010, up from 50% in 2009, as the full impact of restarting previously suspended furnaces was offset by scheduled maintenance. Up to 80% of operational capacity was suspended in 2009.

Ferrochrome producers achieved a 46% increase in the average European benchmark ferrochrome price in 2010, compared with 2009. However, margins remained under pressure as a result of the continued strengthening of the rand against the US dollar.

Lower stainless steel demand in the second half of 2010 resulted in a 5c decrease to $1,25/lb in the European benchmark ferrochrome price for the first quarter of 2011, closing the gap between the contractual and spot prices that existed throughout 2010.

Meanwhile, Xstrata's integrated vanadium operation, Rhovan, located in North West province, achieved record production during in 2010, with an 89% increase in ferrovanadium volumes and 90% higher vanadium pentoxide production than in 2009, when production was suspended as a result of an extended maintenance programme.

The miner’s platinum-group metals volumes were 11% lower than in 2009, resulting from the mining of lower grade areas at Eland, in North West, and delays in obtaining the Section 102 mining right, which was partially offset by improved concentrator recovery.

The development of Eland's western decline Kukama Shaft was progressing, with initial production from the first mining level expected in the first quarter of 2011. Development of the eastern decline Nyala Shaft commenced during April 2010, and production from the first mining level was scheduled for second-quarter 2011.

Xstrata reported that production from underground operations would deliver 250 000 t/m by the end of 2013 and reach a steady state capacity of 500 000 t/m during the last quarter of 2015, with production of platinum reaching 300 000 platinum ounces a year.
 

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