LONDON (Alliance News) - International Ferro Metals Ltd on Tuesday said its two South African subsidiaries have started legal action to protect their interest under the chromite supply agreement in place with Rustenberg Platinum Mines Ltd.
Under the terms of the agreement, Rustenberg is obliged to deliver UG2 chrome ore to International Ferro's South African unit, but Rustenberg has tried to terminate the agreement.
International Ferro said it has received legal advice that the termination is invalid, and the two South African units have started legal proceedings to protect their position under the contract.
The proceedings are expected to be heard in mid-January.
Rustenberg has, in the meantime, agreed to continue to supply the ore International Ferro had been due to receive but which has not yet been delivered. The reduced supply will cut International Ferro's revenue and put "significant strain" on its liquidity it said. As a result, it will not be able to publish its results for the year to the end of June 2015 by the end of December.
International Ferro shares are currently suspended.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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