An inability to meet short-term obligations as a result of historical operating difficulties and sustained financial losses within a capital-constrained operating environment is how Creamer Media’s Mining Weekly describes the reasons behind Evraz Highveld Steel and Vanadium’s decision to file for voluntary business rescue proceedings.

The South African steel and vanadium slag producer – the second largest steelmaker in the country and a primary producer of medium and heavy structural sections – produced 149kt of crude steel in the quarter ended 31 March, down 6.9% from 160kt at the quarter ending 31 December 2014. The latest figure was 0.3% down when compared with the same period last year when the company produced 150kt.

Despite the fact that the company’s management team had a turnaround plan in place – and had achieved positive results – the local market situation scuppered all hopes of recovery.

Evraz Group’s vanadium slag production dropped 2% during the first quarter of the year compared with the prior quarter, due to a 12% drop in South African output on the back of reduced steel production at Evraz Highveld, claims Mining Weekly.

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