INTEGRATED ferrochrome producer International Ferro Metals has reached an agreement with Eskom to assist with the power utility's electricity supply requirements by participating in its electricity buy-back programme for an agreed period.

IFL has agreed to switch out the first furnace from March 1 until May 31 2012, and the second from April 1 until May 31 2012. IFL has the option, under this agreement, to switch back in the first furnace on May 1, provided one month's notice is given by March 31.

Under this agreement, Eskom will buy back the electricity that would have been consumed by the two furnaces, at a rate that results in a net financial benefit to the company.

IFL said its contractual commitments to customers will not be affected as these will be serviced from existing ferrochrome stock and production from the second furnace, which will be switched out on April 1.

Both shutdowns will be executed in a safe and secure manner.

"No job losses will occur as a result of the buy-back programme and the furnace shutdowns will not significantly impact our other mining and ore beneficiation operations, including the operation of the UG2 plant. Furthermore, Bank of China, IFL's lender, is agreeable to this decision," it said.

IFL CEO Chris Jordaan said: "This agreement is value accretive for IFL shareholders, cash generative for the company, helps our national power utility manage its maintenance programme before the winter period, and is agreeable to our lender." - I-Net Bridge