15 Feb 2010 14:17

Ufaleynickel re-starts fourth furnace as market picks up

CHELYABINSK. Feb 15 (Interfax) - OJSC Ufaleynickel, a nickel and cobalt producer that is part of the Industrial Metallurgical Holding (IMH), re-started a fourth furnace on February 12, three days ahead of schedule, as it seeks to take advantage of improving markets for nickel.

A company spokesman told Interfax preparation to restart the furnace began in January and that the furnace had already produced its first nickel matte.

The company, which idled its five furnaces when the crisis hit in October 2008, did not say what the #4 furnace's capacity would be and how much production would increase. It has said it is ramping capacity up due to "the situation that is emerging in the global markets" with demand and prices.

Two of the furnaces went back into operation in February 2009 and one in the summer.

Ufaleynickel, which produces nickel and cobalt, has the capacity to produce 14,000-15,000 tonnes of nickel per year, but the plant was not producing more than 300 tonnes per month in the first quarter of 2009.

Ufaleynickel said towards the end of last year that it did not expect to start producing cobalt again in the near future. It said MMC Norilsk Nickel , which used to supply cobalt concentrate for processing at Ufaleynickel, had signed a contract with a foreign company to process cobalt concentrate until 2012. Ufaleynickel has not produce cobalt since a tolling contract with Norilsk Nickel was severed at the beginning of 2007.

Ufaleynickel expected to close 2009 with net losses of 930.659 million rubles, or 25.4% less than the 1.247 billion rubles it posted in 2008.

IMH controls metallurgical, coke and coal enterprises in Russia and Slovenia. They include coke producer Koks , Ufaleynickel, Tulachermet, metals companies Polema and Tulachermet-Vanadii in the Tula region, Rezhnikel in the Sverdlovsk region.