Annual Report 2012 EUROPE BELGIUM BULGARIA ... - Duferco

Vanchem Vanadium Products
Republic of South Africa
Production (mt)
(01/10/11 - 30/09/12)
4,516 427
Employees
as of 30/09/12
For the 2012 financial
year, an improved
demand for steel
resulted in an
increased demand for
Vanadium.
Vanchem Vanadium Products (Pty) Ltd
(“Vanchem”) is one of the world’s top
five vanadium producers and its assets
comprise various vanadium oxide,
ferro-vanadium and vanadium chemical
production facilities. Vanchem also
owns and manages 50% of South Africa
Japan Vanadium (Pty) Ltd (“SAJV”),
a joint venture company between
Vanchem and Nippon Denko Company
Limited which produces ferro-vanadium
exclusively for the Japanese market. In
addition, Vanchem has a 35% interest
(non-economic) in Mapochs Mine (Pty)
Ltd which holds the vanadium-containing
iron ore reserves of Evraz Highveld Steel
and Vanadium Limited (“EvrazHighveld”).
Vanchem’s interest, together with a formal
supply agreement, secures the long-term
supply of the company’s vanadium raw
material. Vanchem, through Rakhoma
Mining Resources (Pty) Ltd (“Rakhoma”)
holds mineral rights for vanadiumcontaining
iron ore reserves in the
Steelpoort area. The process is underway
to obtain a mining licence, which will lead
to Vanchem securing its own supply of
ore. Good progress has been made in this
regard.
All Vanchem’s products are exclusively
marketed and distributed through the
extensive global network of Duferco
Trading, allowing the business full market
transparency and in-time marketing
intelligence, with strong and direct
relationships with end-consumers.
For the 2012 financial year, an improved
demand for steel resulted in an increased
demand for Vanadium. This, together
with an improved plant performance,
enabled the plant to increase operations
to approximately 84% of capacity, allowing
the business to increase its output by 7%
from FY2011.
Metal Bulletin (“MB”) prices started at
$27.5/kg V in October 2011 and continued
its decreasing trend from the prior financial
year to end the financial year at $24.6/kg
V in September, 2012. A low of $23.0/kg V
was recorded in January, 2012.
The unreliability of utility supplies from
the local municipality remains a major
concern. The power supply interruptions
decreased during the year compared
to the prior year; however, numerous
plant outages were recorded as a result
of water-supply interruptions. A further
concern relates to the maintenance of
the railway-line under the municipality’s
responsibility which impacts the primary
raw material delivery from Mapochs Mine.
A number of challenges are to be
overcome in FY2013. In the prior year,
the focus was on value-adding projects
to improve plant efficiencies and plant
maintenance. For the current year, the
emphasis will be to continue to enhance
plant utilisation and to improve the overall
plant yield, as well as to start the second
phase of the environmental projects which
are required in terms of legislation to
maintain operating licences.
34 | Duferco Annual Report 2012