CORRECTED-DCM DECOmetal to build new shaft at Albanian chrome mine
(Corrects to multi-million-dollar losses (not billion) in fifth para)
* DCM DECOmetal's Albanian unit ACR returns to profit * $12 mln shaft to improve productivity * ACR's CEO hopes ferrochrome market will recover * ACR could sell minority shareholding By Benet Koleka
TIRANA, Oct 1 (Reuters) - Austria's DCM DECOmetal plans to invest in the Bulqiza chrome mine in Albania, betting on an improvement in the ferrochrome market and meeting one of the demands made by strikers who helped push the company into a loss last year.
Roman Lurf, CEO of DCM DECOmetal's wholly owned Albanian Chrome unit, known as ACR, said the company would invest more than $15 million dollars to build a new shaft at Bulqiza and an enrichment plant in nearby Klos.
"The shaft will give the mine an additional lifetime of 20 years and secure jobs. It is a 600-metre-deep shaft and it will improve productivity in the mine," Lurf told Reuters.
He said the company was hoping for a recovery in the market for ferrochrome, an alloy used to make stainless steel, where prices have sunk to between 95 cents and $1 per pound delivered to the customer.
The price was around $1.20 per pound in the first half of 2012, enough to return ACR to profit after multi-million-dollar losses last year when strike action and a fatal accident shut down the mine for more than six months.
"Currently the ferrochromium market is really bad," said Lurf. "The first half was not so bad, so in the first half we turned the company around."
Asked about the first-half profit, details of which have not been published, he said: "We are positive. It's not like we are highly profitable (but) we are making some money to justify working here."
ACR hopes the market will recover in the final quarter of 2012 or early next year. "This price level is no longer sustainable," Lurf added. "It cannot go on forever, because I think most companies are losing money."
ACR mines chrome in Bulqiza, the richest chrome area in Albania, and uses it to produce ferrochrome at its smelter in Elbasan. Since mining restarted in December, it has produced 2,800 to 3,000 tonnes of ferrochrome a month using two furnaces in Elbasan, Lurf said.
Spending $12 million to build the state-of-the-art shaft means ACR is investing much more than the mandatory investment quota for the Bulqiza mine agreed with Albanian government. ACR has invested four times more than required under the deal since taking over the Bulqiza mine last year, Lurf said.
Building the new shaft was also a main demand - along with higher wages - of miners who went on strike last year.
"Last year was a really big disaster, with the strike, with the accident we had," Lurf said.
Shaft equipment is due to arrive in October from China, with work to sink the shaft expected to begin in November and take 18 months to complete, Lurf said.
The Bulqiza galleries run as deep as 824 metres at present.
Listing some of the challenges of working in Albania, Lurf said ACR is trying to get back "a big outstanding amount, of a few millions" in value-added tax from 2009, 2010 and 2011.
Addressing media reports about a possible sale of ACR, Lurf said: "We are not actively looking to sell the company.
"It (ACR) is really the core business of DCM and of course there is a possibility for a partner, a minority shareholder," he added. "That is under investigation, but not to sell the full company ... If we see it makes no sense, we do it by ourselves."
(Editing by Catherine Evans)
Keywords: ALBANIA CHROME/DCMDECOMETAL