SA Chrome technical director Zed van der Walt tells Mining Weekly that the expansion may well increase the company’s ferrochrome output to about 500 000 t/y.
Currently, South Africa produces about three-million tons of chrome a year, and SA Chrome about 235 000 tons of this a year.
The expansion will be made up of two furnaces and a pelletising and sintering plant with a capacity of 235 000 tons.
The development will be 49%-owned by SA Chrome, and 51% by the Chinese company, Jiuquan Iron & Steel Company, or Jisco.
However, the expansion will be managed and operated by SA Chrome.
The furnaces constructed will have a nominal capacity of 54 MVA, but could be increased to 60 MVA, explains Van Der Walt.
Some of the infrastructure will not have to be duplicated, as it will already have been produced at the original furnaces.
However, there may be some new technology used at the new furnaces, Van der Walt states.
Ferrochrome produced by the expansion will be split 50:50 between the two corporations.
Half will go straight to Jisco and its stainless-steel facility in north-east China, and the remainder SA Chrome will sell to Jisco at market-related prices, says Van der Walt.
Eighty-five per cent of ferrochrome production is used in stainless-steel production, with China currently the world’s second-biggest consumer of stainless steel.
The planet’s most populous country is expected to be the biggest consumer of stainless steel within a few years.
Van der Walt reveals that a feasibility study is being conducted into the viability of the new facility.
This is expected to be completed by November.
If approved, Van der Walt expects construction on the expansion to begin early next year.
He reports that the Chinese want to take delivery of the first chrome produced in May 2005.
Van der Walt says that SA Chrome will begin tendering for contracts for the primary facilities and developments in July.
He relates that the South African chrome industry is growing at a healthy rate.
Of the growth of the global chrome industry, 100% of that growth as of late was in this country, says Van der Walt.
What has been detrimental to the industry, though, has been the recent strong showing of the rand.
Nevertheless, despite these problems, Van der Walt says the South African chrome industry’s production could double within the next ten years if stainless steel maintains the growth displayed over the previous decade.
This growth means that, to keep up with demand, the South African ferrochrome industry will need a new SA Chrome-type smelter every year, says Van der Walt.
He adds that the partnership with Jisco will allow SA Chrome to gain a foothold in the lucrative Chinese market, as well as reduce its unit costs.
SA Chrome was established in 1987, with its shareholding divided between the Royal Bafokeng Nation (34,9%), the State-owned Industrial Development Corporation (24,5%), Bateman (5,5%), Finnish company Outokumpu (2,4%), ThyssenKrupp Metallurgie (2,2%) with the other 30,5% being held by a variety of institutions and individuals, says MD Terry McConnachie.