Displaying items by tag: South Africa

UK: Rio Tinto’s production of titanium dioxide slag has fallen by 24% year-on-year to 246,000t/year in the first quarter of 2016. The company said that its Iron and Titanium division had optimised production in line with demand. It reported that two of nine furnaces at Fer et Titane, Canada and one of four furnaces at Richards Bay Minerals, South Africa are currently idled due to low demand for high-grade feedstocks.

"In the face of a testing external environment, our focus remains on delivering further cost and productivity improvements, disciplined capital management and maximising free cash flow, to ensure that Rio Tinto remains strong," said chief executive officer Sam Walsh. Production in iron ore, bauxite and aluminium increased in the quarter but production in copper and coal decreased.

South Africa: Evraz Highveld Steel and Vanadium has announced plans to oppose court action by some of its major creditors, which want to declare the company's business rescue as invalid.

The company, which makes flat steel products, structural steel and vanadium slag, said that it has filed a notice of intention to oppose the further urgent court proceedings that East Metals and Mastercroft instituted against the joint business rescue practitioners of Evraz Highveld Steel and Vanadium and several other affected persons.

South Africa: Evraz Highveld Steel and Vanadium's bankruptcy protection practitioners have named International Resources Limited (IRL) as the successful bidder for South Africa's second-largest steel producer.

Hong Kong's IRL has offered US$26.2m to settle creditors' claims against Evraz Highveld Steel and Vanadium and US$1.49m as a payment to shareholders. IRL, which has interests in mining, forestry and real estate, would invest a further US$307m in the business over the next three to four years to refurbish equipment and build a 200MW cogeneration plant. The company would also increase steel production to pre-2008 levels of 910,000t/yr within 18 months. Following the completion of the capital upgrade, steel production would be increased to 1.5Mt/yr over the next three to four years. In addition, IRL intends to establish an ultra-high grade 23,000t/yr vanadium pentoxide production line. The commissioning of a 200,000t/yr titanium slag production line, producing 75% titanium, would further enhance Evraz Highveld Steel and Vanadium's production site.

Should IRL's proposal be accepted, the company would start production as soon as possible. As an alternative, IRL proposed to buy Evraz Highveld Steel and Vanadium as a going concern for US$26.2m. If neither of the two proposals is accepted, Evraz Highveld Steel and Vanadium would be wound down and creditors might receive between 10 - 14% of their claims.

South Africa: Evraz Highveld Steel & Vanadium Ltd. has set a 21 August 2015 deadline for the receipt of final binding offers for the company.

Potential buyers who have met the US$10m cash requirement have proceeded to the due-diligence phase, granting them access to a 'virtual data room,' as well as scheduled site visits and discussions with the management team and 'other relevant stakeholders.' The virtual data room will also close on 21 August 2015, after which binding offers will be evaluated from 24 August 2015 to 27 August 2015. The successful bidder will be announced 28 August 2015.

Evraz Highveld Steel & Vanadium Ltd., which entered business rescue proceedings in April 2015, will publish its business rescue plan 31 August 2015 and hold a 7 September 2015 meeting to discuss details. The company's Mapochs Mine, also in business rescue proceedings, is set to publish its plan on 30 September 2015.

South Africa: Evraz Highveld Steel and Vanadium has issued a proposed restructuring notice in terms of Section 189 that could see it potentially cutting half of its workforce, according to Engineering News.

The group, which initiated voluntary business rescue proceedings in April 2015, will now enter a 60-day Commission for Conciliation, Mediation and Arbitration-facilitated consultation process with employees and trade unions.

Responding to the announcement, trade union Solidarity, which claims to represent around 400 of Evraz Highveld's 2242 employees, said that it would participate in the consultation process to mitigate the impact on its members. The union said it had already sent a letter to South Africa's largest commercial banks requesting them to 'show consideration' for the financial difficulties currently being experienced by Evraz employees. It further called for, an urgent industry-wide intervention in the metals industry to avoid the retrenchment of 'thousands of workers.'

"In the coming weeks, the trade union will hold probing discussions with various players in the metals industry to explore solutions for the crises currently experienced in the industry. Among other things, we will propose that the local manufacturing sector and construction industry make use only of domestic steel to support the local steel industry. In addition, we will also propose that the steel industry should be exempted from winter electricity tariffs while the industry is recovering," said Solidarity deputy general secretary Johan Kruger.

Evraz confirmed that it had received a number of offers to invest in the company, with prospective bidders required to provide the necessary guarantees by 27 July 2015 to proceed to the next stage of the bidding process. The vertically integrated steel and vanadium slag producer cited its inability to meet its short-term obligations as a result of historical operating difficulties and sustained financial losses within a capital-constrained operating environment as the catalysts for it entering business rescue proceedings earlier in 2015.

South Africa: Evraz Highveld Steel and Vanadium has temporarily ceased steel production at its steelworks, citing working capital constraints and reduced domestic demand mainly owing to a 'significant' increase in steel imports from China.

Evraz said in a statement that it was currently communicating with its employees and it intends to resume production once adequate funding has been secured and steel trading conditions have improved to ensure the company's sustained future financial viability.

The decision to halt production at the company's iron-making division was brought about by delayed debtors payments, inadequate cash to procure the required raw materials to continue with manufacturing operations, difficulties experienced with access to funding and a continued inability to pay major creditors on time. The company added that the feeding of raw materials into the iron-making kilns had been halted to enable the furnaces to be safely drained and switched out, ready for a future start-up.

"The steel plant will be stopped and made safe once all the hot metal has been processed. The two mills will continue operating until all the available stocks have been rolled into saleable products, whereafter these operations will also be safely stopped. The plant and equipment will, for the moment, be placed on care and maintenance and prepared for future start up," said Evraz in a statement.

South Africa's largest steel producer ArcelorMittal South Africa (AMSA) had also recently spoken out about the difficult conditions facing local steel producers. AMSA CEO Paul O'Flaherty recently confirmed that the industry was seeking greater protection from steel imports through the implementation of a 10% ad valorem duty on such imports. Further, the sector had also called for regulations stipulating that locally-produced steel be used in public infrastructure projects.

South Africa: Steel maker Evraz Highveld Steel and Vanadium has reported a 21% drop in steel production for the second quarter of 2015, which ended on 30 June 2015, due to weak domestic demand and a surge of cheap Chinese imports, according to Business Day.

Evraz, which is currently in business rescue, said that hot steel production declined to 119,027t in the second quarter of 2015 from 150,510t in the first quarter of 2015. Hot steel output was 38% lower year-on-year. Vanadium slag output fell by 18% in the second quarter to 1.47Mt, mainly due to lower demand and excess supply.

"The domestic market remains under pressure as a result of poor demand further exacerbated by a surge of low price imports from China," said Evraz. During the first quarter of 2015, which ended on 31 March 2015, 488,000t of steel was imported, amounting to almost half of what was imported during all of 2014.

South Africa: According to Business Day Live, the resources of South Africa's Evraz Highveld Steel & Vanadium, which produces steel and slag, 'are almost depleted,' citing one of the group's business rescue practitioners (BRPs). This means possible liquidation, despite the government having said that it would 'do everything in its power' to ensure that the company remained operational.

The BRPs have until the middle of July 2015 to find a strategic investor to rescue it before Industrial Development Corporation (IDC) emergency funding of up to US$20.3m runs out. "Current trading conditions are extremely difficult. With conditions the way they are, it is going to be tough to rescue the company. Working capital is the number one priority," said BRP Piers Marsden of Matuson Associates. "Fundamentally, market conditions have worsened during the business rescue." He added that there were likely to be continuing operational losses at Evraz Highveld.

Marsden said that the BRPs had drawn US$4.06m of the US$20.3m pledged by the IDC. Seven potential bidders have been lined up, including four multinational groups and three potential black economic empowerment entities. Marsden said that the costs of proceeding to preferred bidder status would be US$10m, for an entity whose estimated US$2.44bn replacement cost has now been written down to only US$122m. The practitioners have not yet issued any retrenchment notices at the company. "We are engaging with unions to try and find solutions," said Marsden.

South Africa: According to Bloomberg, vertically integrated steel and vanadium slag producer Evraz Highveld Steel and Vanadium has announced that Valery Borisov has resigned as executive director and CFO, effective immediately. Evraz Highveld Steel and Vanadium had announced in May 2015 that its business rescue practitioners (BRPs) had appointed non-executive director Andrew Phillip Maralack as its acting CFO.

South Africa: According to Bloomberg, vertically integrated steel and vanadium slag producer Evraz Highveld Steel and Vanadium's business rescue practitioners (BRPs) have appointed non-executive director Andrew Phillip Maralack as acting CFO of the company, with immediate effect. Maralack is a qualified chartered accountant with extensive experience in finance, auditing, business turnarounds, corporate recovery, consulting, the retirement fund industry and corporate governance.

Further, a business rescue plan will now be published on 31 August 2015. In April 2015 Evraz Highveld initiated voluntary business rescue proceedings, citing an inability to meet its short-term obligations as a result of historical operating difficulties and sustained financial losses within a capital-constrained operating environment. Mazars business rescue services director Daniel Terblanche and Matuson & Associates director Piers Marsden were appointed as BRPs.