Ferrochrome

Chromium provides stainless steel with its corrosion resistance. Some 90% of the chromite mined around the world is converted into different grades of ferrochrome and used by the metals industry. The stainless steel industry consumes about 90% of globally produced ferrochrome (mainly high-carbon and charge grade). Global ferrochrome production in 2009 declined significantly due to global production cut backs and totalled 5.6 million tonnes (2008: 7.7 million tonnes). Major producers of ferrochrome are South Africa (41%), China (21%), Kazakhstan (16%) and Finland (2%).

Outokumpu is 60–65% self-sufficient in ferrochrome.

Outokumpu's unique position – a wholly-owned chromite mine in Kemi in northern Finland with its own ferrochrome production located, at the same site as the Tornio Works stainless steel plant – gives the Group a clear competitive edge. The main benefits of this integrated production chain are:

Sourcing of raw material at cost while pricing chromium contained in stainless steel products at the prevailing market price
Transfer of ferrochrome to the Tornio Works stainless steel melt shop in liquid form (savings in energy, transportation and logistics costs)
The use of carbon monoxide gas emanating from the ferrochrome process as fuel in the stainless steel mill (reducing the need for external energy supplies)

Outokumpu is 60–65% self-sufficient in ferrochrome and able to satisfy the Tornio Works' needs internally. Recycled stainless steel provides most of the balance, but primary ferrochrome is also purchased on the global market.

According to a seismic research report produced by the Geological Survey of Finland in late 2009, the mineral resources at the Kemi Mine could turn out to be significantly greater than earlier estimates. The intrusion containing chromium ore extends to a depth of 2–3 kilometres, possibly to four kilometres and the chromitite layer possibly extends to a depth of at least 2–2.5 kilometres or more.

Proven ore reserves at the Kemi Mine total some 37 million tonnes and the quantity of mineral resources totals some 87 million tonnes (estimated to a depth of 1 kilometre). The new information indicates the existence of resources sufficient to allow centuries of mining activity even with doubled annual production volumes (the previous estimate was 70–80 years). Outokumpu's mineral resources will not be updated based on these findings.

Kemi Mine and Tornio ferrochrome smelter
Production	2009	2008	2007
Ore excavated, million tonnes	0.5	1.3	1.2
Chromite concentrates, 1 000 tonnes	247	614	556
Ferrochrome, 1 000 tonnes	123	234	242

Ore reserves and mineral resources
Dec. 31, 2009		Million tonnes	Grade
Ore reserves
Proven		37	26% Cr₂O₃
Mineral resources
Indicated		13	30% Cr₂O₃
Inferred		73	29% Cr₂O₃