JOHANNESBURG (miningweekly.com) – Ferrochrome output during the three months to September jumped 47% on the previous quarter, London-listed ferrochrome producer International Ferro Metals (IFM) reported on Thursday.

Production for the 2014 financial year first-quarter ramped up to 57 849 t, compared with the 39 454 t delivered in the June quarter, and the 57 949 t reported in the corresponding period the year before, as the company had both furnaces operating for the full quarter under review.

“IFM has performed strongly this quarter, demonstrating the company's progress and turnaround generating cash throughout the winter tariff period,” CEO Chris Jordaan said in a statement, adding that further improvements on availability and use of capacity were expected to further boost production in the coming quarters.

Both furnaces were continuing to achieve operational stability and performed “extremely well” during the period.

IFM, over the past year, experienced productivity and operational challenges, owing to recurring electrode breaks, and agreed to shut down the two furnaces – one at a time, but in some cases simultaneously – in a buy-back programme with State-owned power utility Eskom until mid-2013.

IFM also initiated an asset management improvement programme to focus on effective and efficient maintenance work management, as well as elimination of top order failures causing downtime.

Meanwhile, the higher production stimulated higher sales volumes during the period under review.

Ferrochrome sales for the first quarter reached 52 249 t, up 39% from the preceding quarter’s sales of 37 665 t, but were marginally down from the 54 003 t sold in first quarter of 2012.

“About one-third of the sales were channelled into regions outside Europe and the US as IFM started to regain its strategic sales position in Asia, mainly driven by its cost competitiveness,” noted Jordaan.

The producer’s inventory for the first quarter of the 2014 financial year was 15 550 t, up from 9 950 t at June and 14 795 t at September 2012.

“The planned build-up was as a result of committed sales for the next quarter. Stocks are expected to reduce to about 10 000 t over the next quarter,” he explained.

IFM had also achieved 88% of its cost reduction target of R0.76/lb on the 2011 financial production cost of R6.25/lb, stripping out changes in unit electricity and reductant prices.

The first quarter’s adjusted production cost fell to R5.58/lb, compared with R5.56/lb during the previous quarter.

The company generated R64-million cash from operations, with R68-million – R50-million owing to increased ferrochrome inventory – in working capital used and R14-million and R12-million in financing and investing activities used respectively.