Project Development

IFM has acquired the rights to the adjacent Sky Chrome property and its substantial ore reserves. A new mine will be started there in partnership with the local tribe, the Bapo Ba Mogale, ensuring IFM remains self-sufficient in ore for in excess of 40 years.

Construction of three additional 66MVA smelting furnaces is planned to commence in the near future, together with an additional 700 000 tonnes per annum pelletising and sintering plant and beneficiation plant. This expansion will increase output by 150 percent, from its current 267 000 tons tpa to 665 000 tpa a year.

Furnace Expansion plans

The expansion plan consists of the following four components:

a) Expansion of chromite extraction from Lesedi mine which is in production and the Skychrome project, where a mine feasibility study is underway;

b) Construction of an additional beneficiation plant at Buffelsfontein with a capacity of 1,800 ktpa. The feasibility study has been completed. The current beneficiation plant has a capacity of 1,000 ktpa;

c) Construction of an additional pelletising and sintering plant at Buffelsfontein with a capacity of 700 ktpa. The feasibility study has been completed. The current pelletising and sintering plant has a capacity of 400ktpa;

d) Construction of three additional 66MVA submerged arc closed furnaces which will provide an increase in capacity of 400 ktpa of ferrochrome. The feasibility study has been completed. The current two furnaces have a capacity of 267ktpa of ferrochrome.

The planned completion dates of the beneficiation plant, pelletising and sintering plant and the three furnaces will be staggered. Each component requires electricity with the furnaces consuming 85% of total requirements.

This year, during constrained electricity supply, IFL has operated its mine, beneficiation, sintering and pelletising plants at capacity, electing to reduce furnace consumption to comply with overall Eskom guidelines to consume no more than 90% of capacity consumption.

In January 2008, Eskom provided a commitment letter to IFM which confirmed the provision of electricity for the proposed expansion. The feasibility study assumes that Eskom will honour its commitment to supply electricity for the expansion from connection during January 2010 and that each component will be constructed simultaneously. However should final confirmation of full electricity supply not be received this quarter, the feasibility study provides for a staged expansion roll out as follows:

Stage One
The initial stage entails expansion of IFL’s mining operations and construction of the 1800 ktpa beneficiation plant. This stage commenced in May 2008 with the commencement of the second decline at the Lesedi mine. Stage 1 can be developed within the current electricity availability. The expanded mine and beneficiation plant is expected to be in production in the September 2010 quarter. IFL intends to sell surplus chrome ore arising from this phase of the expansion to the export market at favourable ore prices.

Stage Two
On receipt of confirmation that adequate electricity supply will be available, IFL plans to commence construction of the additional pelletising and sintering plant and the three furnaces. The 700 ktpa pelletising and sintering plant will consume 6 MW of electricity. The 400 tpa additional furnace capacity will consume 162 MW of electricity. These furnaces are expected to take 18 months to construct.

Electricity Generation Plant (Clean Development Mechanism Project)

During the first half of 2007, IFL commenced work on a Clean Development Mechanism Project to generate electricity from off-gasses produced by its furnaces. An order has been placed for 10 electricity generators from GE Jenbacher. The estimated cost of the project is R200 million. The internal feasibility study reports that the project should produce additional electricity of up to 12.9MW, sufficient to substitute the interim 10% reduction imposed by Eskom in January 2008. The plant should be operational by 1 July 2009.