JOHANNESBURG (miningweekly.com) – The attributable ferrochrome production from the Glencore Merafe Chrome Venture for the fourth quarter was 70 000 t, resulting in a marginal increase of approximately 0.3% in production for the year ended December 31 when compared with the prior comparative period.

Merafe’s attributable ferrochrome in the third quarter ended September 30 was also a moderate 2%-higher 76 000 t, resulting in an increase of 2% in production for the nine months, primarily attributed to all operating smelters being in production throughout the winter months.

In the nine months to September 30, Merafe’s attributable ferrochrome production totalled 230 000 t, compared with 225 000 t for the same period in 2023 and 300 000 t for the year.

The Johannesburg Stock Exchange-listed company’s latest Stock Exchange News Service reports production for 2024 of 301 000 t.

Merafe’s revenue and operating income are primarily generated from the Glencore Merafe Chrome Venture, which has a total installed capacity of 2.3-million tonnes of ferrochrome a year.

South Africa, once the mainstay of global ferrochrome production, today supplies most of the chrome for China’s stainless steel production, which represents a beneficiation reversal caused mainly by the high electricity prices charged by Eskom.

Market share was lost despite the private sector's significant investment in expanding local beneficiation capacity. This was the result mainly of the public sector failing to provide the required volume of electricity at a competitive price.

A competitive environment needs to be created to maximise the use of existing ferrochrome capacity.

In the past, 100% of metallurgical grade chrome ore was beneficiated locally. At one stage, 20% of mining-related foreign exchange was earned from ferrochrome sales.

Ferrochrome is a prime ingredient of stainless steel and most of the ferrochrome produced in South Africa is consumed by China, which is the world’s biggest producer of stainless steel.

There is growing conviction that with available new technology, South Africa could go all out to regain its lost market share at a time when South Africa is entering a new era of public-private collaboration, which is targeting economic growth that is inclusive.

South Africa’s chrome value chain once provided more than 200 000 jobs. However, jobs have been progressively shed as South Africa’s ferrochrome industry, the beneficiation baseline of the chrome value chain, went into deteriorating decline.

The point has been made that no reasonable competitive entity anywhere in the world could justifiably aver that it is not correct for South Africa, as a country that hosts overwhelming volumes of raw ore, to have the duty to process as much raw ore as possible close to where that ore is mined.

Promising new Proudly South African technology called SmeltDirect is positioned to take the greenness and cleanness of ferrochrome to a high new level at a time when the likes of Carbon Border Adjustment Mechanism (CBAM) imposition are only a little over a year away, in a region where combatting climate change remains an essential requirement.

SmeltDirect promises to be on the receiving end of value from CBAM carbon credits, giving South Africa an open window of opportunity to regain lost ground with bottom-of-the-cost-curve competitiveness.

This new technology has been developed over the last 13 years by the Johannesburg Stock Exchange-listed African Rainbow Minerals (ARM) headed by executive chairperson Dr Patrice Motsepe.

ARM has no intention of holding SmeltDirect close to its chest. On the contrary, ARM Ferrous division CE Andre Joubert, and ARM executive: technology development Henk Bouwer, are determined to do what is best for South Africa as a whole and that is to spread the patented SmeltDirect as far and as wide as possible by retrofitting it to the considerable number of dormant smelters so that restarts get under way without delay.

Advantageously, SmeltDirect not only has all the attributes to reverse South Africa’s downward ferrochrome and ferromanganese slide but could even open the way for a return of the local production of other lost but greatly needed products such as high-manganese rail.

A detailed bankable feasibility study has been completed, engagement with ferroalloy peers on joint venture partnerships has taken place, and funding and co-financing arrangements for what will be a major generator of direct and indirect jobs are showing early promise.

Some 700 jobs are created for every 200 000 t of alloy production a year and South Africa was once a producer of about four- or five-million tons a year, which points to the potential of creating tens of thousands of new jobs.

Moreover, the use of renewable energy with biocarbon can slash Scope 1 and 2 carbon emissions by up to 80% and Scope 3 emissions are halved.

What must not be ignored is that SmeltDirect uses 70% less electricity, cuts costs meaningfully, slashes emissions and can make good use of the lowest of low-grade input materials.

Only 1.2 MW of electricity is needed to produce a ton of alloy, unlike the 4 MW required by conventional systems.

At one stage, installed ferrochrome capacity alone was 4.8-million tons. Getting back to that competitively would be of substantial benefit to the South African economy and should be implemented as part of a public-private programme. 

Knowledgeable visitors from around the world have given the fully operational SmeltDirect demonstration plant at ARM’s Machadodorp Works a firm thumbs up.

The strong belief is that if South Africans work together on a new return to local ferroalloy production, there is a potential for the country to return to being a valuable contender in competitive ferroalloy production.

As has been pointed out earlier by Mining Weekly, SmeltDirect is able to process fines and slimes as well as carbonate manganese ore and ensure export in value-added form.