Reuters reported that South Africa's Merafe Resources said that first quarter production rose by 3.8%, but said the company would operate at a lower rate during June to August 2011 period.

Merafe said that first quarter attributable production of ferrochrome, used in stainless steel to prevent corrosion, rose to 82,000 tonnes from 79,000 tonnes in the same period of 2010. The 82,000 tonnes represent 91% of its operating capacity.

The company said ferrochrome producers had achieved an 8% rise in the European benchmark price for the second quarter to USD 1.35 per pound from the previous three months.

It said that "This was offset by the strong rand against the US dollar and overall cost pressures that are at levels well above inflation."

Merafe, which operates a joint venture with Xstrata, said that it would conduct routine maintenance at several of its furnaces which would dent output.

It added that "Xstrata Merafe venture will operate on average at 65% of operating capacity during the winter months."

It added that the companies usually choose to conduct maintenance during this period to mitigate the impact of higher than average winter electricity tariffs.

(Sourced from www.reuters.com)