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Chrome ore and charge chrome

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Chrome ore and charge chrome

April 15, 2023 nflg 0 Comments


Chrome ore is mined at Assmang’s Dwarsrivier Mine near Lydenburg in Mpumalanga province and production is used mainly to supply Assmang’s Ferrochrome Works at Machadodorp. The group also mines chrome ore near Rustenburg (Rustenburg Minerals Development Company (Proprietary) Limited) (RMDC) from established open-cast operations and a recently opened underground shaft, with a second underground shaft being commissioned by December 2011.

RMDC is 44% held by a black economic empowerment (BEE) partner (refer “Black economic empowerment” report). Production from RMDC is supplied mainly to the local market. Reprocessing of chromite tailings has commenced at Zeerust Chrome Mines Limited (Zeerust) north of Groot-Marico in the North West province, and limited open-cast operations on the chromite seams are anticipated to commence during the last calendar quarter of 2010.

The bulk of chrome ore mined worldwide is converted to ferrochrome and utilised in the production of stainless steel. Since the economic turmoil in 2008, this market has experienced a slow recovery, with production of stainless steel in 2009 approximately 4% lower than calendar 2008.

The current stainless steel market is split into two geographic areas, each with very different dynamics. During the year under review, Chinese production was more than 10 million tons, making it by far the largest stainless steel producer in the world. On the other hand, both the USA and Europe, the previous core stainless markets, are still substantially below 2008 levels with little sign of any recovery, which will be dependent on economic growth, and in particular construction growth in these areas. Total world production for 2010 is expected to be 20% above that of 2009, at approximately 30,0 million tons (2009: 25,3 million tons).

Demand for ferrochrome was consequently much stronger than was anticipated a year ago and production restraint was exhibited by most South African producers. This resulted in pricing recovering strongly, with the European contract price recovered by more than 50% from its low point in 2008. However, with a cutback in stainless production in Asia towards the end of the period and little sign of improvement in the USA and Europe, there are concerns that there may be pressure on pricing going forward.

Assmang’s charge chrome sales increased by 48% to 152 000 tons for the financial year (2009: 103 000 tons), while chrome ore sales
increased by approximately 6% to 272 000 tons (2009: 256 000 tons). RMDC produced and sold approximately 216 000 tons (2009: 338 000 tons) run of mine, lumpy and concentrate, and Zeerust produced and sold approximately 4 000 tons concentrate in the
financial year.

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