AMN - SOUTH AFRICA: Tharisa formalises chrome deal

Platinum group metals (PGM) and chrome producer Tharisa has entered into a strategic co-operation agreement with Shanxi Taigang Wanbang Furnace Charge Co, a JV company of Chinese giant Taiyuan Iron & Steel Co (TISCO). The agreement covers the annual supply of at least 240,000 tonnes of metallurgical grade chrome concentrate from Tharisa's South African PGM operations.

The five-year deal starts in September and covers around 25% of Tharisa's production at market prices.

Tharisa has historically supplied metallurgical grade chrome concentrates to the JV and has a demonstrated ability to supply the required volume and quality of material on a regular basis, culminating in the strategic co-operation agreement.

TISCO produces approximately 4 million tonnes of stainless steel a year and through its JV has installed an Outokumpu ferrochrome sintering and pelletising plant with annual producing volume of 300,000 tonnes of ferrochrome.

With the advent of more stringent environmental regulations in China, the ferrochrome industry is switching from open and semi-closed furnaces to more efficient and environmentally friendly technologies.

TISCO typically purchases approximately 1 million tonnes of ferrochrome annually to feed its steel plants. It also produces approximately 300,000 tonnes of ferrochrome from its JV.

One of the world’s largest stainless steel producers, TISCO is considering a phase 2 expansion of the Outokumpu plant, which would increase annual production to 450,000 tonnes and subsequently increase its requirements for metallurgical chrome concentrate.

Chief executive Phoevos Pouroulis said, "Tharisa is pleased to have formalised its relationship with TISCO, a long-time client.

“The co-operation agreement further cements our position in the Chinese market and underpins our order book.

"It is also encouraging to note that spot chrome prices have increased above US$200/tonne on the back of improved stainless steel production."

Tharisa’s PGM operations are in the south-western limb of the Bushveld Complex, about 95km northwest of Johannesburg and 35km east of Rustenburg. The mine has an estimated open pit life of approximately 18 years and an estimated further 40 years underground and has been in production since November 2009.

www.tharisa.com