The current electricity crisis will not interfere with the Dilokong chrome-mine expansion project, says ASA Metals COO Herman Smith.

ASA Metals, a joint venture between Eastern Asia Metals Investment, of China, and Lim- popo Economic Development Enterprise, of South Africa, is expanding its Dilokong chrome mine.

Dilokong beneficiates about 600 000 t of raw chromite to produce about 480 000 t of chromite ore. It achieved new annual production records, with increases of 23% at its mine and smelter during the 2006 and 2007 financial years.

The new project aims to increase the current production of ferrochrome to 365 000 t/y.

“Our expansion project, which incorporates expanding both our mining and smelting operations, is aimed at further increasing value for all of our stakeholders,” says ASA Metals MD Richard Zhang.

He says that the company has mining rights to more than 47-million tons of unexploited chromite resources, and that opportunities exist to supply the additional charge chrome required to sustain the expected growth in stainless steel production.

In order to convert the company’s idle reserves into value, plans are being made to sink two new shafts and to construct a 1,2-million-ton- a-year beneficiation plant, a 600 000-t/y pelletising and sintering plant, two 66-MVA closed, submerged-arc furnaces fitted with preheaters, and a raw materials handling and batching facility.

“We have purposefully elected to invest capital in tried and tested technology. To this end, we have selected Pyromet, Metix and Outotec as our technology suppliers. All three companies have been extensively involved in similar projects in South Africa in the past. By following this strategy, we are convinced that the project will be delivered on time and within the approved budget,” he adds.

He notes that the expansion project will not only add value for the company’s shareholders, but will also transfer value to the surrounding community by creating job opportunities.

The mine and smelter are situated in an area where poverty is rife and, together with the Department of Minerals and Energy, the Limpopo provincial government and the local municipality, the company aims to alleviate this poverty.

After the expansion has taken place, Smith says, 2 400 jobs will be created.

On the current electricity crisis not hindering the expansion, Smith says: “We’re running our operations at 90% of capacity at this stage, but it’s not critical.

“We were fortunate that we started talks with Eskom more than two years ago. The project is one of the last expansion projects that were approved by Eskom, and after meetings with Eskom, the project will go ahead smoothly. The transformers Eskom must install in our substation have already been ordered.

“Although good relations with Eskom have been established, we still need to monitor [the relations], as it doesn’t mean that, because we have a commitment, Eskom can supply,” he says.

Zhang notes that the company has grown extensively during the last ten years.

“In the late 1990s, the company operated a small chromite mine and sold most of its product to other South African charge chrome producers and overseas clients. At that point, leaders within both Sinosteel and Limdev recognised the potential of further developing the small mining operation into an integrated charge chrome producer.

“We constructed and commissioned a 33-MVA furnace in 1999, followed by a second and bigger 45-MVA furnace in 2003. Our underground mining operations were also expanded in order to provide the chromite requirements of our smelter,” he adds.

The company has increased pro- duction at its mining operations by more than 28% during the last 24 months and achieved record annual production in both 2006 and 2007. He reveals that this increase in production was accomplished by a limited capital expenditure and that the increase in production volumes further allowed for a decrease (in real terms) in the company’s cost of production during 2007.

“Production at our smelting operations was increased by more than 26% during the past two years and, as was the case with the mine, we achieved annual production records in both 2006 and 2007. “This increase in production was achieved as a result of improved operating efficiencies and utilising the current plant and equipment more effectively. This is demonstrated by the cost of production, which has decreased in real terms for the past two years in a row.”

The company also remarks that its safety performance has improved during the last three years.

“We have now operated for more than one-million shifts without sustaining a fatality. Our disabling-injury frequency rate has also decreased due to enhanced focus on identifying and mitigating risks.”

 

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