* Co to shut two furnaces between March and May
* Shutdown not to hurt other operations
* Says compensation a net financial benefit
March 1 (Reuters) - Ferrochrome producer International Ferro Metals Ltd agreed to shut two of its furnaces to help South African utility Eskom manage tight electricity supply.
International Ferro did not say how much Eskom was paying as compensation but said it was a “net financial benefit to the company.”
The company said it did not expect the shutdowns to significantly impact other mining and ore beneficiation operations, and its contracts with customers. No job cuts were anticipated either.
South Africa has been struggling to meet demand for power as new power plants meant to plug the shortfall have been delayed. Supply would remain vulnerable until the first units of Eskom’s new stations become operational next year.
State-owned Eskom had struck similar agreements with other ferrochrome producers such as Xstrata, Samancor and Ruukki.
Sydney, Australia-based International Ferro produces ferrochrome -- the essential ingredient in stainless steel -- at its facilities located in South Africa.
International Ferro said it would switch out the first furnace in March-May and the second in April-May.
The company had the option to switch the first furnace back in on May 1 if it intimated Eskom by March 31.
International Ferro’s shares closed at 19.25 pence on Wednesday on the London Stock Exchange. (Reporting by A. Ananthalakshmi in Bangalore; Editing by Roshni Menon)