Attributableferrochrome production volumes were 21% lower than the first half of 2011, mainly due to the rescheduling of maintenance programmes in response to a comparatively soft market and Eskom, the South African national electricity supplier, buying back power to counter electricity shortages. Financial compensation received from Eskom covered the costs and lost profits incurred as a result of reduced volumes.

 

Ferrochrome producers achieved a 17% increase in the average European benchmark price from USD 1.15 per pound in the first quarter to USD 1.35 per pound in the second quarter, driven by reduced supply in the market. Margins, however, remain under pressure as a result of continued strong mining inflation, increased standing charges and a relatively strong rand compared to the US dollar. The third quarter European benchmark price was settled at USD 1.25 per pound.

 

The Tswelopele palletizing and sintering plant is on track to be commissioned during the second half of 2012, on time and on budget and will further reduce input costs at our ferrochrome smelters.

 

Despite a 9% increase in PGM volumes between the first and second quarter of the year, production for the first half of 2012 was 22% lower than the corresponding period in 2011 as Eland mine continued its transition to an underground operation following the cessation of opencast operations in the final quarter of 2011 and due to ongoing unreasonable Section 54 safety stoppages in common with the rest of the mining industry. Mototolo Mine achieved record first half production with production volumes of over 200,000 ROM tonnes per month.