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Assmang invites power plant bids for Machado, eyes Cato
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13th December 2010
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JOHANNESBURG (miningweekly.com) – South African ferroalloys producer Assmang on Monday invited expressions of interest for the establishment of a 20 MW cogeneration power plant at its smelter in Machadodorp, and is mulling similar cogeneration at its Cato Ridge works.

Mining Weekly Online can report that Assmang intends cogenerating power from three open furnaces and a single closed furnace at Machadodorp in Mpumalanga, where both ferrochrome and ferromanganese are produced and which is likely to serve as a pilot for cogeneration of electricity at the Cato Ridge ferromanganese works in KwaZulu-Natal.

Assmang is owned jointly by Patrice Motsepe’s JSE-listed African Rainbow Minerals (ARM) and Des Sacco’s JSE-listed Assore.

“We’re looking at alternative options to bring down the cost and usage of electricity,” says ARM Ferrous executive operations André Joubert, who was speaking to Mining Weekly Online in the absence of ARM Ferrous CE Jan Steenkamp, who is on leave.

Project leader and ARM group electrical engineer Marius Herselman says that Assmang has invited two separate expressions of interest, one from independent power producers (IPPs) and a second from engineering, procurement and engineering (EPC) contractors.

Should the IPP bid succeed, Assmang will buy the power from the IPP for its own use at a fixed price, with the IPP financing, building, owning and operating the plant.

Should the EPC bid succeed, Assmang will own and operate the power plant itself.

In order to improve the project’s economic viability, the winning bidder will be required to register the cogeneration project under the Kyoto Protocol’s clean development mechanism, as part of the United Nations framework convention on climate change.

Studies show that the use of a freely available furnace heat will enable Assmang to generate electricity at a cost lower than the Eskom price.

With technology suppliers quoting roughly from R24-million to R17-million an installed megawatt – depending on whether the furnaces are open or closed – it is anticipated that the cogeneration plant will require a capital outlay of from R480-million to R340-million.

Of the four Machadodorp furnaces, three are for the production of ferrochrome and one for the production of high-carbon ferromanganese.

In September, Assmang announced that it was evaluating the conversion of additional Machadodorp furnaces from ferrochrome to high-carbon ferromanganese production, owing to the strong market demand for high-carbon ferromanganese.

The conversion of a further two Machadodorp furnaces would increase the producer’s high-carbon ferromanganese capacity to 400 000 t/y and would make about 100 000 t/y of additional product available to the market.

Conversion will also be a boost for the cogeneration project as the ferromanganese production process enhances both the quantity and the quality of the off gas available for power generation.

The company’s chrome division contains both the Machadodorp ferrochrome works and the Dwarsrivier chrome mine; its manganese division is made up of the Cato Ridge ferromanganese works and the Nchwaning and Gloria manganese mines; and its iron-ore division consists of the Beeshoek and Khumani iron-ore mines.
 

Edited by: Creamer Media Reporter

 

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