Integrated resources group Tharisa CFO Michael Jones says the company’s Vision 2020 strategy, which is aimed at increasing production to 200 000 oz of platinum-group metals (PGMs) and two-million tonnes of chrome concentrates by year-end 2020, is well on track.

Tharisa, which published its financial results for the six months ended March 31 last week, also announced that it had acquired a 90% shareholding in Salene Chrome Zimbabwe from the Leto Settlement Trust.

Leto will retain a 10% free carried shareholding in Salene and be entitled to a 3% royalty on the gross proceeds from the sale of the chrome concentrates produced.

Salene has been awarded three special grants under the Zimbabwe Mines and Minerals Act, covering about 9 500 ha.

“The newly acquired asset in Zimbabwe forms part of our geographical diversification, as we are moving away from the single mine assets that we have in South Africa. “It’s also a low-cost, low-risk entry into a new geography in a market and industry that we understand,” Jones explained in an interview with Mining Weekly.

Should everything go according to plan, Tharisa expects to effectively have its first pilot plant at Salene up and running within the next 12 months, after having started the exploration programme.

“If our estimates of the geology are right, it’s going to be a very meaningful contributor to our chrome business segment,” Jones said.

He further highlighted that Tharisa had appointed a country manager, Dr Josephat Zimba, who would be responsible for managing the Zimbabwe asset.

In terms of further geographic and commodity diversification, Jones highlighted that Tharisa was continuously looking at a number of opportunities, which might or might not come to fruition.

While boasting a culture of innovation through initiatives to push for added levels of improvement, in both mining and recovery, Tharisa further continues to be a strong cash generative business, which Jones says is underpinned by a solid operational performance.

The group has, through its low-cost coproduction business model delivered “robust operational and financial results” for the six months to March 31.

The group reported a profit before tax of $37.2-million for the interim period, with net cash flows from operating activities at $52.1-million.

Earnings per share amounted to $0.10 and Tharisa declared a maiden interim dividend of $0.02 per share.

The first half of the 2018 financial year also marked Tharisa’s transition to an owner-operated mining model, which Jones highlighted was accelerated by the controlling shareholders of the mining contractors reviewing their interests and whether to be staying in contractor mining.

“While it’s an accelerated transition, it’s been a long-term intention to . . . take control of our mining and grades,” he added.

Where mining contractors were generally more focused on the volume moved, Tharisa aimed to ensure the quality of the product it was moving to its plant, Jones noted.

Further, Tharisa’s average PGM contained-metal basket price benefited from the increases in palladium and rhodium prices, contributing to an increase of 19.6% to $909/oz from $760/oz year-on-year.

Average contracted metallurgical grade chrome concentrate prices, however, decreased to $193/t from the $278/t reported in the first half of the 2017 financial year.

While current metallurgical chrome spot prices are trading at similar levels, global growth in stainless steel production remains robust, with an independent market research company forecasting a further rise in worldwide output of nearly 5% this year.

“Our chrome concentrates are [supplied], principally, into the Chinese market. China then produces the stainless steel, [some of] which is then exported. Surprisingly, the majority of produced stainless is used for their own domestic consumption,” Jones told Mining Weekly.

The US-imposed steel tariff affecting China would, therefore, not have a negative impact on Tharisa’s production selling prices, he said.

Production milestones for Tharisa in the period ended March 31 included an 11.4% increase in PGM production, while PGM recoveries increased to 83.2% from 78.3%, exceeding the targeted 80%.

Chrome production was 732 500 t, a 15% increase on the 636 800 t produced in the first half of the prior financial year, and chrome recoveries improved to 65.9%, from 63.4%, exceeding the targeted 65%.