International Ferro Metals South Africa

Source: Energy Digital

Date :11/04/2008 15:40:27

Having worked in the ferrochrome industry for 32 years, Mike Horn explains how International Ferro Metals South Africa will overcome market challenges ?in order to expand

Written by Lucy Mowatt and Produced by Alex Smith

In the light of problems with pressure rings at their furnaces, with their electricity supply and a small skills base, it would be easy to see how a young company like International Ferro Metals South Africa (IFMSA) could become overwhelmed; however, it hasn’t. Mike Horn, COO of IFMSA (Pty) Ltd, explains that the business is positive about overcoming adversity.

With 32 years in the ferrochrome industry, Mike has been involved with IFMSA since its parent company, IFML, carried out the initial feasibility studies in 2003 and he explains the company has made extensive progress. In September 2005 IFM was listed on the AIM market, before moving to the main list of the LSE and subsequently being admitted to the FTSE 250 in December 2007.

There are plenty of opportunities for growth too, Mike explains, “South Africa supplies 90 percent of the world’s charge chrome.” With significant reserves of chrome ore, the main raw material used to produce ferrochrome, South Africa is able to supply to increasing numbers of stainless steel manufacturers, many of which are based in China.

In fact, 50 percent (currently about 120,000 tons) of IFMSA’s output is exported to China, to Jiuquan Iron and Steel Company (JISCO), who holds 29.1 percent of IFML’s shares, a figure which has recently increased from 26.1 percent. However, with the plans for expansion at the company’s plant, the tonnage shipped to China is expected to reach 300,000 tons.

Phase Two

A number of programmes are in place to increase capacity for the South African company. “What we are planning to do is introduce three additional furnaces, which will increase annual production from 265,000 tons to 665,000 tons,” Mike says.

With this ongoing programme, IFMSA will build three more closed, submerged arc furnaces at the IFMSA site in Buffelsfontein. These closed furnaces are more environmentally friendly than the open furnaces currently used by other producers in the industry. A pelletising and sinter plant has also been built by the company to ensure that fine materials produced by its mine can be recycled back into the furnaces. Water recycling, environmentally responsible rehabilitation of its site and strict monitoring of the plant’s environmental impact enhances the company’s environmental programme.

“That’s why we market our plant as a green plant. IFM is the only ferrochrome producer in South Africa not to have environmentally disasterous open furnaces,” Mike states. In addition to the existing facilities, the company also plans to build another beneficiation plant and a further pelletising and sinter plant.

As if that wasn’t investment enough, IFMSA is in the process of developing a new mine, just five kilometres away from its existing site. “It’s an ongoing project where we are currently looking at feasibility because it includes an additional mine owned by IFML,” Mike explains. This study is due to be complete by the close of April 2008. After the feasibility study, the Board of IFML will decide on the project’s commencement date. The project will significantly increase chrome ore and ferrochrome output.

This second phase will see new pre heaters installed for all furnaces, which use CO gas to pre-heat raw materials before it enters the furnace. Pre heaters provide significant cost savings to the process due to its energy and chemical reaction efficiency. Additional heat from the process will also be diverted to an electricity generation plant.

“We’re going to generate about 30 MW, which is about ten percent of our existing usage,” Mike states. IFMSA is currently in talks with a company to build the power plant, which will not only improve the environmental impact of the site, but also result in significant cost savings.

Planning in advance

IFMSA is planning to increase its workforce substantially. “At the moment there are about 350 people employed by IFMSA, we’ve got a contractor doing our mining operations and we’ve got contractors doing our internal transport work and that brings the total number of people working on site with IFMSA to 1100 people,” Mike says. This figure is expected to increase to around 2300 people in Phase Two.

Because of this reliance on contractors, IFMSA nurtures its partnerships in order to get the best service it can. “We’re building good relationships with them...If you look at the contractors that we’ve got on site now, we will probably use them for the expansion as well. Better the devil you know than the one you don’t know,” Mike says.

However, IFMSA has already acknowledged that there could be difficulties in securing a workforce that is skilled in ferrochrome production for the expansion. Mike continues by explaining that the alloy industry is relatively small, with a limited number of trained potential employees. In line with this, the company is already making moves to meet its own requirements by implementing accelerated learning programmes for its employees, using batch recruitment and training systems, and increasing the recruitment pool by providing learnerships (apprenticeships) and skills programmes to non-employees from the nearby communities.

This has helped to improve the level of unemployment around the mining areas too. “We’ve got a good relationship with the local communities...when this company started about 80 percent of the people were unemployed in this area, but we now employ many people from this area,” Mike explains.

IFMSA is currently employing more management staff, who can assist with the training of new employees. These training schemes are due to begin in April this year, which will ensure that employees are up to speed with the industry before the expanded facility is in production in 2010.

Standards

In 2008 the company is also planning to attain certification of its integrated management system. By September 4th this year, IFMSA plans to gain the ISO 9002, ISO 14001 and ISO 18001 certification from TUV, which will ensure its integrated management system complies with international safety, health, environment and quality standards.

“All of our safety procedures are already in place because we have employees from the industry who know what needs to be done,” Mike explains. This experience has resulted in no fatal accidents and minimum lost time injuries.

The company is also audited by the DME (Department of Minerals and the Energy), with very positive inspection reports, while a third party company is employed to monitor IFMSA’s performance on a quarterly basis.

“We’re very proud of our plant and very proud of the people working for us,” Mike says. Although the company is young, it is set to overcome adversity, with significant investments in its people, technology and environment, the increased price of ferrochrome and its safe environment. Mike concludes by saying it’s no wonder that “everybody wants to work for IFMSA”.

Click here to view the corporate brochure on International Ferro Metals South Africa