Power woes hit Merafe

Reporting its annual results to end December 2007, the company said this had been done as "a precautionary measure" should the joint venture be "unable to supply the required quantities of ferrochrome due to the reduction in the operations' electricity supply".

The decision will free both Merafe and Xstrata from liability or obligation in cases where its production is affected by reduced electricity supplies from Eskom.

Merafe said the joint venture had reduced electricity load across all its furnaces in response to the request by Eskom.

A shortage of power resulted in most of South Africa's mines and smelters being shut down for a week at the end of January.

Subsequent to this, Eskom promised its key customers it would supply 90% of the operations' electricity demand.

This came into effect at the beginning of February, and Merafe said the joint venture's operations were currently operating at that electricity load.

"It is still uncertain as to when the remaining 10% will be restored, suffice to say that it will be entirely dependent on the success of a nationwide recovery plan presented to major industrial and local government users," the company said in a statement.

The Xstrata-Merafe Chrome Venture has a total managed capacity of 1.96m tonnes of ferrochrome production per annum.

- I-Net Bridge