IFL.L Regulatory News (IFL)

23 Jan 2008 07:01

International Ferro Metals Limited23 January 2008 23 January 2008 International Ferro Metals Limited ("IFL" or the "Company") Trading update and Board changes International Ferro Metals Limited (LSE: IFL), the integrated ferrochrome producer, today provides a trading update on both its production and stock levels to 31 December 2007 and announces changes to its senior management team and Board. Highlights: •Production for the six months to 31 Dec 2007 was 93,317 tonnes of charge chrome •On track to produce 133,700 tonnes in the six months to 30 June 2008 •Stock held as at 31 December 2007 was 42,442 tonnes of charge chrome, all of which has subsequently been sold •Enforceable commitment from Eskom to supply electricity for the planned expansion •David Kovarsky will join the Board as Managing Director in February 2008 Financial statements for the half year to 31 December 2007 are scheduled to be announced in mid-March 2008. Therefore, all figures provided in this announcement are taken from unaudited management reports for the six month period. Production UpdateThe six months to 31 December 2007 were dominated by the ramp-up of the integrated ferrochrome production facility. As was announced in September 2007, production from our two furnaces was temporarily disrupted resulting from an operational failure of the pressure rings within the furnaces and electricity supply interruptions. The replacement programme for the electrode pressure rings was completed successfully and over one month ahead of schedule, resulting in full operating capacity being restored in early December 2007. The impact to the ramp-up programme resulted in 93,317 tonnes of ferrochrome being produced in the six month period to 31 December 2007 against a designed capacity of 133,700 tonnes; a shortfall of 40,383 tonnes. As previously announced, the production was reduced by 30,000 tonnes as a result of the redesign and replacement of the forty eight electrode pressure rings. Over the period, a further 10,383 tonnes of production was lost primarily through interruptions to electricity supply. The major effect was felt during December and affected the whole of the South African ferrochrome industry. The Board believes that the facility is on track to produce at full capacity throughout the second half of the fiscal year, subject to the availability of the contracted electricity supply. Stock LevelsStock levels of ferrochrome as at 31 December 2007 were 42,442 tonnes, representing eight weeks of capacity production. While the stock was committed for sale, logistical issues surrounding transporting the material to port prevented the stock from being loaded. This stock has now been sold and will be included as January 2008 sales. Electricity Supply AgreementEskom, the sole supplier of electricity in South Africa, has announced to the market that it is expecting supply shortages through to 2013. Eskom has however confirmed that IFL has an enforceable commitment to supply electricity to operate IFL's three planned new furnaces as well as its current two furnaces. During this time the Board expects it to be more difficult for new entrants and those competitors in South Africa who do not hold prior electricity supply agreements to increase production capacity. The commitment is a result of Eskom being party to IFL's first stage business planning in 2006 which detailed the Company's planned expansion of production capacity. Board and Management ChangesAs IFL moves to the next phase of its development, the Board is pleased to announce today that in February 2008 David Kovarsky will join as Managing Director and will become a member of the Board. A further announcement will be made in due course following his formal appointment to the Board. David has extensive experience in the ferrochrome industry, both in operations and construction and was the CEO of South Africa's largest submerged arc furnace supplier, Pyromet, which designed and constructed IFL's two ferrochrome furnaces and its beneficiation plant. Prior to joining Pyromet, David was an executive director of JCI Limited with direct management responsibility for Consolidated Metallurgical Industries (CMI); at that time the world's second largest ferrochrome producer. David has for many years been a valuable contributor to IFL having assisted in its initial feasibility studies, plan construction and commissioning, and as a result has a close working relationship with IFL's management team. His skills and operating experience will enhance the Board and management team as the Company concentrates on maximising production and prepares for its planned furnace expansion. In the second half of 2008, the Chairman, Tony Grey, will cease his executive role with IFL and become the Non-executive Chairman. Stephen Turner, Chief Executive Officer, commented: "2007 was a year dominated by the construction and ramp-up of the ferrochromefacility. We expect to be at full capacity during this coming year, a highlightof which will be the commencement of construction of the additional plant andmine development to increase production capacity by 150%. "Against a background of record ferrochrome prices and a strong outlook forcontinuing demand, we look forward with confidence. "I am delighted the Board has confirmed the appointment of David as ManagingDirector. His role will be to ensure that the existing plant operatesconsistently at design capacity and to help drive forward the planned expansion.He has the ability, knowledge and experience of both the ferrochrome industryand IFL to fulfil this role. My role will be to help ensure David has all thenecessary support in his new role as Managing Director, and to maintain theBoard's full engagement in the key strategic issues and direction. " For further information please contact: International Ferro Metals LimitedStephen Turner, Managing DirectorMob: +61 418 440 844www.ifml.com Brunswick GroupPatrick Handley / Carole CableTel: +44 (0) 20 7404 5959 Numis Securities LimitedJohn Harrison / Stuart SkinnerTel: +44 (0) 20 7260 1000 Notes to editors:IFL produces ferrochrome, the essential ingredient in stainless steel, from itsintegrated chromite mine and ferrochrome processing operations in South Africa. This information is provided by RNS The company news service from the London Stock Exchange