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Xstrata-Merafe JV shuts furnaces as it joins Eskom buy-back

13 Dec 2012
JOHANNESBURG ( – The Xstrata-Merafe chrome venture would close five of its twenty furnaces at various of its plants for three months next year to participate in State utility Eskom’s electricity buy-back programme.

JSE-listed Merafe reported on Wednesday that it estimated a loss in ferrochrome production of 100 000 t during the January 1 to March 31 shutdown, but assured that no jobs would be lost as a result of the closures.

Eskom said last month that was finalising various demand- and supply-side agreements, including a new round of power buy-backs, to enable it to catch up with its maintenance programme, which was affected by lower supplies from Cahora Bassa, in Mozambique, between August and November.

The utility was seeking an additional 600 MW to 1 000 MW of demand- and supply-side options over the coming six months.

Ferrochrome producer Hernic already indicated that it would participate in the new buy-back programme by temporarily shutting down two furnaces at its De Kroon operations from December 1 and March 31, 2013.

The shutdown would reduce Hernic’s total production capacity by 40% and would be the second time in 2012 that the company will shut off two furnaces during Eskom’s peak summer maintenance period in return for monetary compensation.

Eskom spent R1.8-billion between mid-December 2011 and the end of May, buying back power from industrial customers, most of which were in the ferrochrome sector.

“The buy-backs are considered in the light of the risks that occurred in the winter period and the need to ensure that there is additional maintenance done to improve the reliability of the generation fleet,” Eskom spokesperson Hillary Joffe said on November 30.