Ferroalloy plant in Georgia resumes production after four-month halt

TBILISI. March 20 (Interfax) - The Zestaponi Ferroalloy Plant in Georgia's Imereti region has resumed production after it was halted on November 1 last year, but the Chiatura Mining and Processing Plant (CMPP, which produces raw materials for the ferroalloy plant) remains idle, Georgian Ferroalloy Association Chairman Nugzar Kevlishvili said.

"Production [in Zestaponi] has resumed, which will have a positive impact on exports in the coming months. One furnace has been operational since March 1 and will gradually increase capacity. At this stage, the plant is operating at 50%-60% capacity. If prices rise further, production will increase," Kevlishvili was quoted by the Georgian publication BusinessPressNews as saying.

"The company has brought in an expert, and he confirmed that mining is currently unprofitable. The drop in ferroalloy prices has also led to a decline in ore prices. Accordingly, once prices rise, Chiatura will likely resume operations. At this stage, mining is not being conducted, as it is not profitable for the company," Kevlishvili said when commenting on the situation at the CMPP.

Ferroalloy production in Georgia has declined due to falling prices for these products on the global market, he said.

According to Georgia's National Statistical Service, ferroalloy exports from the country fell 60% in January-February this year to $16.63 million. The Zestaponi plant accounts for 80% of ferroalloy production in Georgia.

The main markets for Georgian ferroalloys are Turkey, the U.S., Egypt, Italy, Azerbaijan, Russia, Spain and the UK.

As reported, Georgian Manganese, which owns the Zestaponi Ferroalloy Plant and the CMPP, suspended operations at both facilities on November 1 last year. The company cited falling global prices and a shortage of ore, which cannot be mined at the Chiatura mine due to ongoing protests by local residents. More than 5,400 employees were sent on leave with 60% pay, the company said.

Georgian Manganese Holding, operating since 2006, is Georgia's biggest mining and ferroalloy company, and is one of its biggest employers. The company includes the Chiatura mines, the Zestaponi plant which produces silicon manganese, and the Vartiskhe hydropower pant, which supplies the enterprises with electricity.

According to Georgian media, employees of CMPP have been protesting since March against the cessation of underground mining operations by the company, and are demanding that the state take over the management of mining activities.