JOHANNESBURG (miningweekly.com) – The new manganese alloy smelting project in Malaysia was not an abandonment of the company’s commitment to viable beneficiation, African Rainbow Minerals (ARM) ferrous division CE Jan Steenkamp said on Monday.
Steenkamp was answering questions after ARM posted 8% higher headline earnings for the year to June 30, which saw its share price rise 4% to R196 a share. (Also watch attached video).
“We’re not walking away from local beneficiation,” Steenkamp assured, in giving the compelling reasons why ARM, in joint venture with Assmang, would be constructing a 160 000 t/y, $328-million manganese alloy smelting facility in Sarawak, Malaysia, together with China Steel Corporation and Sumitomo Corporation.
Assmang will supply South African manganese ore for the project; China Steel will buy an estimated 30 000 t/y of the manganese alloys produced; and Sumitomo Corporation will coordinate the project and sell manganese alloy in specific markets.
The company is also working on another investment, the details of which are not yet in the public domain, to find solutions for profitable local beneficiation on a larger scale, with the help of new research and development.
In the meantime ARM is holding on to the advantage of retaining integrated production boosted by high-grade South African manganese and will continue the search for longer-term solutions.
An attractive 15-year electricity supply agreement, at a fixed 2.5% escalation clause, has been concluded in Malaysia, where the electricity is already 12% to 15% cheaper than in South Africa.
The project has also managed to clinch the last distribution capacity from the first phase of the new hydro power station.
Failure to go ahead with the integration Malaysian opportunity would have resulted in the closure of local plants and the loss of jobs at both plant and mine levels, Steenkamp told Mining Weekly Online.
“Our commitment to local beneficiation continues,” ARM executive chairperson Patrice Motsepe said, on the basis of it being globally competitive and profitable.
The company’s South African smelters have been hit by weak market demand, which has led to two furnaces being placed on care and maintenance.