New ferroalloy technology pilot results ‘looking great’, Merafe presentation hears

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The results of the pilot testing of a new Proudly South African smelting technology, which lowers electricity usage and has the potential to render local ferroalloy beneficiation globally competitive once more, were described as "looking great" during question time at Merafe Resources' presentation of 2024 financial results on Monday, March 10.

These words were uttered amid Merafe reporting that global stainless-steel production increased in the period, as did demand for ferrochrome, the feedstock on which it depends. Stainless steel is used almost everywhere in modern life, from nuclear reactors to exhaust pipes, architecture, kitchenware and a host of other applications.

South Africa's major advantage is that it hosts most of the world's chrome resources and chrome is regarded as a metallurgical major in the manner in which it brings critical properties to the metals with which it is alloyed.

Against that background, South Africa became the world's leading ferrochrome producer at a time when South Africa was one of world's lowest cost producers of electricity.

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

London- and Johannesburg-listed Glencore owns 28.82% of Merafe and South Africa's State-owned Industrial Development Corporation 21.88%.

Merafe has a 20.15% stake in the Glencore-Merafe Joint Venture, which produced some 1.5-million tons of ferrochrome in the 12 months to December 31 but has the capacity to produce considerably more with the right technology.

The Johannesburg Stock Exchange-listed company is currently reviewing smelting operations, leveraging technology for optimisation and cost reduction, and focusing on environmental sustainability, which includes a new solar plant.

Asked by an analyst about the extent to which the envisaged 100 MW renewables project would provide the venture's power needs, assuming all 22 furnaces are operational, Merafe FD Ditabe Chocho responded that although it would be a fraction of what the smelters need to produce, it would be sizable enough to make a difference towards cost reduction and decarbonisation.

"Our total requirements, from a smelters point of view, are in the region of 800 MW to 900 MW," Chocho added.

Pilot trialling to date has indicated that by retrofitting Proudly South African SmeltDirect to smelters can slash their electricity requirement by up to 70%, take them to the low end of the cost curve, and render them far more environment-friendly.

In the meantime, South Africa's once leading status in the global ferrochrome field has been reduced to having to export increasing volumes of raw ore and decreasing volumes of ferrochrome, which is of considerably higher valued and which is easier to transport.

SmeltDirect is seen as potentially being able to put the emphasis back on not only value-added ferrochrome production but also ferromanganese and other ferroalloys.

Merafe reiterated during question time, after presenting a 62% decrease in basic earnings per share to 26.7c, its preference is to convert chrome ore into value-adding ferrochrome.

"Our first prize will always be to convert the chrome into ferrochrome because we believe, from a South African perspective, ferrochrome production should happen in South Africa," Glencore Operations South Africa CEO Japie Fullard emphasised in reply to an analyst.

Asked by Mining Weekly about the trialling of the new SmeltDirect technology, which some say has the potential to restore South Africa to its former ferroalloy glory, Fullard was called upon by Chocho to respond and this is what he said: "I'm sure you're well a...