Ruukki Group Plc ("Ruukki" or the "Company") (LSE: RKKI, OMX: RUG1V) is pleased to announce that the Company's subsidiary Mogale Alloys (Pty) Ltd has entered into a contract with Asenza CC and the technology supplier UHT Uvån Hagfors Teknologi AB in relation to the installation of ferroalloy refining and granulation equipment. The equipment complements Mogale's current four furnaces producing low phosphor ferrochrome and low phosphor silicomanganese.
Once the installations are complete, a significant part of the current ferrochrome production can be converted to granulated medium carbon ferrochrome. This is in line with the Company's goal to provide niche products into mature markets to increase profitability and optimise shareholder value.
The final capital estimate for the project is approximately 170 million South African Rand including management costs and contingencies. The Company is considering a number of available options to finance the project but it is expected that it will be financed through a combination of internally generated funds and loan capital obtained from financial institutions. The project will commence during July 2013 and it is anticipated that the first production of specialty alloys will commence during Q3 2014. Current production levels at Mogale Alloys (Pty) Ltd will be maintained during the implementation phase.