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    • Mining Iron Ore and Chrome South Africa

    Mining of Iron Ore and Chrome in South Africa 2019

    Alex Conradie | South Africa | 15 November 2019

    Mining of Iron Ore and Chrome Industry in South Africa 2015

    Alex Conradie | South Africa | 29 July 2015

    Report Info

    Report Summary Table of Contents
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    Report Coverage

    This report on the mining of iron ore and chrome includes comprehensive information on the size and state of the industry, its major players, and their activities and corporate actions in South Africa, on the continent and globally. There are profiles of 21 companies including Kumba Iron Ore, which dominates the iron ore sector, and other players such as Assmang and Palabora Copper. Chrome producers profiled include integrated ferrochrome producers Glencore (Glencore-Merafe), Samancor and Afarak.

    Introduction

    During 2018, South Africa produced 74.3 million tons (Mt) of iron ore and 17.9Mt of chrome ore, making the country the sixth-largest and largest producer respectively, according to the United States Geological Survey (USGS). Data obtained from the International Trade Centre’s Trade Map shows that iron ore exports in 2018 amounted to 63.4Mt, earning US$4.2bn, while 12.4Mt of chrome ore valued at US$1.9bn was exported. According to the Minerals Council South Africa, 18,613 people were employed by the iron ore mining sector in 2018, while the chrome ore mining sector had 18,935 employees. Rapidly rising input costs and policy and regulatory uncertainty are some of the challenges faced by the iron ore and chrome ore mining sectors.

    Strengths

    • In 2018, the average iron content of Kumba’s ore was 64.5%, compared to figures ranging between 64.1% and 57.7% for its main competitors.
    • Kumba Iron Ore’s main competitive advantage is its high lump-to-fine ratio, which was 68:32 in 2018, while the global average was 20:80.
    • Some local ferrochrome companies are among the lowest-cost producers in the world.
    • South Africa has world-class ferrochrome manufacturing facilities boasting state-of-the-art technology.
    • South Africa holds 36% of the world’s chromite reserves.
    • South Africa is the world’s largest exporter of chrome ore and ferrochrome.
    • South Africa is the world’s largest producer of chrome ore and the second-largest producer of ferrochrome.
    • South Africa is the world’s third largest exporter of iron ore.

    Weaknesses

    • Demand for chrome ore and ferrochrome is heavily reliant on demand for stainless steel, which is largely determined by economic conditions.
    • Demand for iron ore is heavily reliant on demand for crude steel, which is largely determined by economic conditions.
    • Ferrochrome sales to China are impacted by exports of chrome ore from South Africa, which is enabling the growth of the ferrochrome industry in China.
    • Shortage of skills in certain disciplines.
    • Since South African iron ore producers are small compared to the dominant companies, they are price-takers rather than price-setters.

    Opportunities

    • Demand for higher-grade iron ore is increasing in China.
    • Expected growth in demand for both chrome ore and ferrochrome due to increasing stainless steel production.

    Threats

    • Added costs in the form of the carbon tax.
    • Continuing uncertainty regarding South Africa’s mining regulatory framework.
    • Lower world economic growth leads to decreased demand for iron ore and chrome ore.
    • Rapidly increasing production costs, in particular electricity, water and labour costs.

    Outlook

    Iron Ore According to Australia’s Resources and Energy Quarterly report, global trade in iron ore is forecast to decrease by 4.2% in 2019 to 1,529Mt, before increasing to 1,568Mt in 2021. As production from Vale and Australia increases over the next two years, the seaborne market is expected to become oversupplied, due to lower steel production and increasing scrap usage in China. The price of iron ore is therefore forecast to drop to US$61 per ton in 2020 and US$57 in 2021, from an average of US$80 in 2019. Kumba Iron Ore is targeting iron ore sales volumes of between 43Mt and 44Mt for 2019, compared to sales of 43.3Mt in 2018. Chrome According to KPMG, world stainless steel supply is expected to grow from 48.4Mt in 2017 to 57.7Mt in 2022, while the demand for ferrochrome is forecast to increase up to 2022. Merafe Resources expects the current surplus in the ferrochrome market to decrease or turn into a deficit as a result of a decline in output in certain countries in the next 12 months. This should lead to an increase in prices. The expected increase in demand for ferrochrome should lead to growth in chrome ore demand and, consequently, chrome ore prices.

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    Mining of Iron Ore and Chrome in South Africa
    Mining of Iron Ore and Chrome in South Africa 2019

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    Industry Landscape

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    Mining of Iron Ore and Chrome Industry in South Africa 2015-07-29

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    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION OF THE INDUSTRY 1
    2.1. Industry Value Chain 1
    2.2. Geographic Position 4
    3. SIZE OF THE INDUSTRY 6
    4. STATE OF THE INDUSTRY 8
    4.1. Local 8
    4.1.1. Trade 13
    4.1.2. Corporate Actions 15
    4.1.3. Regulations 17
    4.1.4. Enterprise Development and Social Economic Development 21
    4.2. Continental 22
    4.3. International 23
    5. INFLUENCING FACTORS 30
    5.1. Economic Environment 30
    5.2. Labour 31
    5.3. Mine Safety 33
    5.4. Environmental Concerns 34
    6. COMPETITION 35
    6.1. Barriers to Entry 37
    7. SWOT ANALYSIS 38
    8. OUTLOOK 39
    9. INDUSTRY ASSOCIATIONS 39
    10. REFERENCES 39
    10.1. Publications 39
    10.2. Websites 40
    APPENDIX 1 - SUMMARY OF NOTABLE PLAYERS 42
    Mining of Chrome and Production of Ferrochrome 42
    Mining of Iron Ore 45
    COMPANY PROFILES - MINING OF CHROME AND PRODUCTION OF FERROCHROME 47
    AFARAK GROUP OYJ 47
    ANGLO AMERICAN PLATINUM LTD 51
    ASSORE LTD 55
    BAUBA RESOURCES LTD 59
    EASTERN PLATINUM LTD 63
    GLENCORE OPERATIONS SOUTH AFRICA (PTY) LTD 66
    IMPALA PLATINUM HOLDINGS LTD 70
    JUBILEE METALS GROUP PLC 75
    LANXESS CHROME MINING (PTY) LTD 79
    NORTHAM PLATINUM LTD 81
    SAMANCOR CHROME LTD 86
    SIBANYE GOLD LTD 89
    THARISA PLC 95
    THUTSE MINING (PTY) LTD 99
    COMPANY PROFILES - MINING OF IRON ORE 101
    AFRIMAT LTD 101
    ASSMANG (PTY) LTD 107
    ASSORE LTD 111
    KUMBA IRON ORE LTD 115
    MANNGWE MINING (PTY) LTD 119
    PALABORA COPPER (PTY) LTD 121
    SEDIBENG IRON ORE (PTY) LTD 124
    STRATA AFRICA RESOURCES (PTY) LTD 126

    Report Coverage

    The report on the Chrome sector describes the current market, outlines developments within the sector and focuses on factors influencing the success of the local industry. The report also profiles nine companies, including the world’s largest ferrochrome producer Glencore Operations South Africa (Pty) Ltd, which employs 9,500 people at its seven chrome mines and five ferrochrome plants, and the second-largest producer, Samancor Chrome, which owns two mines and three ferrochrome plants.

    Introduction

    This report focuses on the mining of chrome ore, also known as chromite, in South Africa. Chromite contains the elements chromium and iron and is the sole commercial source of chromium. During 2014 the South African chrome mining sector produced 15 million tonnes (Mt) of chromite and exported 7Mt of the material worth US$1.1bn, while employing more than 18,000 people in 2013. Challenges faced by this sector include unreliable and reduced electricity supply, falling prices, rapidly escalating production costs, and the impact of strikes. As well as rising productions costs, South African ferrochrome producers have to deal with low ferrochrome prices they have to agree to because their steel mill customers cannot afford higher prices.

    Strengths

    • Local companies are among the lowest-cost producers in the world.
    • South Africa has world-class ferrochrome manufacturing facilities boasting state-of-the-art technology.
    • South Africa holds more than 41% of the world’s chromite reserves.
    • South Africa is the world’s largest exporter of both chromite and HC ferrochrome.
    • South Africa is the world’s largest producer of chromite and the second-largest producer of ferrochrome.
    • The largest chromite and ferrochrome producing companies are well-established in South Africa.

    Weaknesses

    • Ferrochrome sales to China are impacted by exports of chromite from South Africa, which is enabling the growth of the ferrochrome industry in China.
    • Shortage of skills in certain disciplines.
    • The industry is heavily reliant on demand from stainless steel production, which is largely determined by economic conditions.

    Opportunities

    • Expected growth in demand for both chromite and ferrochrome due to increasing stainless steel production.
    • Ferrochrome production and exports can be increased if production costs can be lowered or at least maintained.
    • The EU’s anti-dumping duties on stainless steel from China should result in increased European demand for South African ferrochrome.

    Threats

    • Implementation of a carbon tax.
    • Low ferrochrome price.
    • Lower world economic growth leads to decreased demand for chromite and ferrochrome.
    • Rapidly increasing production costs.
    • South Africa’s mining regulatory framework is complex and contains many uncertainties.
    • The lack of consistent and reliable electricity supply.

    Outlook

    According to Merafe Resources, world stainless steel production is expected to grow by 5% in 2015 and 2016, while the demand for ferrochrome is forecast to increase by 8.3% and 5.1% in 2015 and 2016, respectively. The apparent consumption and demand for stainless steel is forecast to grow, at least till the end of 2016. The expected increase in ferrochrome production will lead to growth in chromite demand and, consequently, chromite prices. The resultant higher production costs for Chinese ferrochrome producers should result in higher ferrochrome prices, while the European Union’s recently imposed anti-dumping duties on stainless steel from China should result in increased European demand for ferrochrome and also put upward pressure on ferrochrome prices. Should prices not increase, the ferrochrome producers globally will come under severe pressure because of production cost increases. According to International Ferro Metals, growth projections beyond 2015 show that additional ferrochrome production will be required and that chromite availability will present a challenge because of a stagnant chromite supply pool and a lack of investment in new mines. Ferrochrome production levels in South Africa are expected to stabilise around the 4Mt per annum level going forward as most local producers are operating at optimal production levels.

    Read More..
    Mining of Iron Ore and Chrome Industry in South Africa
    Mining of Iron Ore and Chrome Industry in South Africa 2015

    Full Report

    R 1 900.00(ZAR) estimated $112.22 (USD)*

    Buy Now +

    Industry Landscape

    R 1 330.00(ZAR) estimated $ 78.55 (USD)*

    Buy Now +

    Historical Reports

    Mining of Iron Ore and Chrome in South Africa 2019-11-15

    R 1 900.00(ZAR) estimated $112.22 (USD)*

    View Report Add to Cart

    Table of Contents

    [ Close ]
    PAGE
    1. INTRODUCTION 1
    2. DESCRIPTION OF THE INDUSTRY 1
    2.1. Industry Value Chain 2
    2.2. Geographic Position 3
    3. SIZE OF THE INDUSTRY 5
    4. STATE OF THE INDUSTRY 7
    4.1. Local 7
    4.1.1. Corporate Actions 9
    4.1.2. Regulations 10
    4.1.3. Enterprise Development and Social Economic Development 13
    4.2. Continental 13
    4.3. International 14
    5. INFLUENCING FACTORS 17
    5.1. Government Support and Intervention 17
    5.2. Labour 17
    5.3. Economic Environment 19
    5.4. Rising Input Costs 20
    5.5. Information Technology 21
    5.6. Environmental Concerns 21
    5.7. Mine Safety 21
    5.8. Power Supply 22
    6. COMPETITION 22
    6.1. Barriers to Entry 24
    6.2. Research and Development (R&D) 24
    6.3. Innovation 25
    7. SWOT ANALYSIS 25
    8. OUTLOOK 26
    9. INDUSTRY ASSOCIATIONS 27
    10. REFERENCES 27
    10.1. Publications 27
    10.2. Websites 28
    ORGANOGRAM 29
    COMPANY PROFILES 30
    ASSMANG (PTY) LTD 30
    DILOKONG CHROME MINE (PTY) LTD 33
    GLENCORE OPERATIONS SOUTH AFRICA (PTY) LTD 35
    HERNIC FERROCHROME (PTY) LTD 40
    INTERNATIONAL FERRO METALS (SA) (PTY) LTD 43
    LANXESS CHROME MINING (PTY) LTD 46
    MARICO CHROME CORPORATION (PTY) LTD 48
    RUSTENBURG MINERALS DEVELOPMENT COMPANY (PTY) LTD 50
    SAMANCOR CHROME LTD 52

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