IFL.L Regulatory News (IFL)

15 Mar 2006 09:54

International Ferro Metals Limited15 March 2006 15 March 2006 International Ferro Metals Limited ("IFM" or "the Company") IFM enters into agreement with Mittal Steel South Africa Limited Coke and Chemicals Division ("Mittal") International Ferro Metals Limited (TIDM: IFL) announces that its subsidiary,International Ferrometals (SA) (Pty) Ltd has entered into an agreement withMittal Steel South Africa, Africa's largest steel maker, for the guaranteedsupply of 100,000 tonnes of market coke at favourable pricing. Under the agreement, Mittal Steel South Africa, a producer of approximately 7.1million tonnes per annum ("tpa") of liquid steel will, through its Coke andChemicals division provide IFM with 100,000 tpa of market coke for a period ofthree years with an option to extend the agreement. This supply will meet all ofIFM's coke requirements for the operation of its two-ferrochrome furnaces whichare currently under construction. The support of Mittal Steel removes a further risk from the operation of IFM'sferrochrome facility. The Company also has long-term agreements in place for thesupply of electricity from Eskom, South Africa's primary electricity supplierand the sale of product to Jisco, a Chinese state owned steel producer situatedin China's Gansu province and a major shareholder in IFM, and Commercial MetalsCompany. Mittal is the only local producer of market coke in South Africa, with a currentcapacity of 445,000 tonnes per annum. The market for coke is growing rapidly andMittal Steel South Africa has commissioned the construction of a ZAR455 million/450,000 tpa coke oven battery at its Newcastle mill with completion of the cokeoven battery expected in August this year. Stephen Turner, Managing Director of IFM, commented: "We are delighted toannounce our agreement with Mittal. By agreeing our coke provider and settingthe price in advance we are guaranteeing supply and reducing our exposure to anyvariation in supply which is pivotal at this early stage of our development." Davinder Chugh, Chief Executive Officer of Mittal Steel South Africa said: ""Thecontract will ensure stable, sustainable and competitive local production offerro-alloy coke, even with the very large variations in international coal andcoke market conditions." ENDS For further information please contact:International Ferro Metals Limited Parkgreen CommunicationsStephen Turner, Managing Director Simon Robinson / Ana RibeiroMob: 07748 245 691 Tel: 020 7493 3713 Notes to Editors About International Ferro Metals Limited International Ferro Metals Limited ("IFM") listed on AIM in September 2005 whenit raised £80m with a Placing of 228,571,429 new Ordinary Shares at 35 penceeach. It had already raised debt financing from Standard Bank, Nedbank and SAABSupporter. The proceeds of the fund raising are being used to finance the construction ofthe Buffelsfontein ferrochrome smelting and mining operation near Mooinooi inthe North West province, South Africa. International Ferro Metals (SA) Pty Limited ("IFMSA") is the wholly ownedsubsidiary of IFM and will operate the Buffelsfontein project. Global Eagle,chaired by Seth Phalatse, is IFMSA's black economic empowerment partner. One of IFM's major shareholders is its Chinese partner, Jiuquan Iron and SteelGroup Company Limited ("JISCO"). JISCO has entered into an off-take agreement tobuy ferrochrome from IFM at market related prices and will market ferrochrome inChina, Taiwan, Japan and Korea. IFM has also entered into a marketing agreementwith New York-listed Commercial Metals Company, which will act as an agentoutside JISCO's territories. Chromium Chromium is the most abundant of the Group V1A family of metallic elements,comprising chromium, molybdenum and tungsten. Ferrochromium Chromium is introduced into irons, steel and many super alloys by alloying withthe intermediate product, ferrochromium. This is produced by thepyrometallurgical reduction of chromium ore with carbon and/or silicon in hightemperature electric arc furnaces. Some 6 million tonnes of ferrochromium were produced in 2005 and about 90% isused in stainless steel making where chromium is an essential ingredient.Essential, because it is Chromium that makes stainless steel "stainless", thealloying that allows its remarkable corrosion and oxidation resistance. This information is provided by RNS The company news service from the London Stock Exchange