UPDATE 2-Xstrata declares force majeure on SAfrican metals

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By Daniel Magnowski

LONDON, Feb 1 (Reuters) - London-listed miner Xstrata (XTA.L) has declared force majeure to its vanadium and ferrochrome customers as power shortages disrupt mining in South Africa, the firm said on Friday.

South Africa is the world's biggest producer of ferrochrome, an essential ingredient in stainless steel, and is also a major source of vanadium, used to harden steel for use in oil pipes.

Xstrata, one of the top producers of both metals, said it might be able to deliver the materials as normal, but had declared force majeure to cover the possibility that it might miss delivery schedules.

"Xstrata Alloys has declared force majeure to its ferrochrome and vanadium customers as a precautionary measure in the light of reduced electricity supply to its ferrochrome and vanadium operations from Eskom (South Africa's power utility), as part of a national energy shortage in South Africa," the firm said in a statement.

"It is not possible at present to evaluate accurately what impact these restrictions will have on the supply of ferrochrome and vanadium to our customers, but we will work to mitigate any impact on customer deliveries as far as possible," it said.

Power cuts have disrupted production across the South African mining industry, a pillar of the country's economy.

Gold XAU= and platinum XPT= prices hit fresh highs on Friday as buyers worried about supply. [nL25350124]

Prices of vanadium VAN-FERRO-LON and ferro-chrome FECRO-HC-RU jumped this week, as the prospect of lower supply from South Africa has sent customers in Europe scrambling for metal, traders said.

(Reporting by Daniel Magnowski, editing by Chris Johnson)