The exporting of raw chrome ore to China is still a “problem that is a thorn in the side” of the South African ferrochrome industry; however, moves to block such exports are being made at the highest level, reports ferrochrome major Merafe Resources.
In March, Mining Weekly reported that the “unbridled” and “suicidal” export of raw chrome from South Africa was worsening. At the time, Merafe CEO Steve Phiri reported that the company had noted that more and more people were getting into the chrome ore industry and showing no signs of becoming integrated producers that beneficiate raw chrome into ferrochrome.
Phiri also reported that no progress had been made with government to block such exports. However, four months on, Phiri paints a different picture.
At the company’s recent half yearly results presentation for the period ended July 2009, Phiri said that the company was in continuous consultation with the Department of Mineral Resources (DMR), and progress had been made to amend the Mineral and Petroleum Resources Development Act to block such exports, as they were detrimental to the country’s ferrochrome industry as a whole.
He added that the company was confident that a solution to the problem would be found; however, the DMR had to engage with the other members of the business cluster to ascertain whether a move to block such exports would be viable.
Phiri had not ignored, though, the potential that the Asian market could offer the company, in its recovery from the worst results recorded in its history.
Although there had been a significant decrease in worldwide demand for stainless steel, demand from the Asian market was still significant enough to help the company recover from its current position.
Statistics show that 2009 ferrochrome demand from China is 1,92-million tons. This is significantly higher than the demand from the entire European Union, which is 1,69-million tons. Demand from South Korea, Taiwan and India, collectively is 1,06-million tons.
China’s 2009 demand for ferrochrome was slightly lower than its 2008 demand for ferrochrome, which was 1,98-million tons. Chinese ferrochrome imports increased by 44% in the first half of 2009, when compared with imports for the corresponding period in 2008.
Phiri reported that the company had managed to save the jobs of its 6 000 permanent employees.
This was largely attributable to the company having limited cash burn.
Phiri added that it would be senseless for the company to retrench any of its staff as it was a high-tech company that needed a high level of skills on hand when the furnaces were brought back on line.
Phiri reported that the company had ended its relationship with a number of contract workers; it had also made no new appointments and had not promoted any workers.
With a recovery from the global economic crisis in sight, Phiri reported that the company had brought back on line 11 of the furnaces that it had shut down during the worst part of the crisis. He added that it would be keeping an eye on the market to ascertain the best time to restart the remaining nine furnaces.
Source: Mining Weekly
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