Our operating context

The global position of ferrochrome

Elements influencing the global demand for and pricing of ferrochrome

• Global economic conditions
• Exchange rates
• Stainless steel demand
• Growth of Chinese ferrochrome industry
• Chrome ore exports

  The global position of ferrochrome

90%
of the ferrochrome
produced is used
in stainless steel and
specialty steels

2%
growth rate forecast
for stainless steel
production in 2016

 

   Ferrochrome production and its role in stainless steel

Produced by high-temperature reduction (smelting) of chromite, ferrochrome contains iron, chrome, minor amounts of carbon and silicon and impurities such as sulphur, phosphorous and titanium.

Chrome is a metallurgical marvel. It brings amazing properties to the metals with which it is alloyed. Add it to carbon steel in the form of ferrochrome and the steel becomes ‘stainless’ – corrosion resistant, mechanically strong, heat resistant, hard wearing, shiny and glamorous. Stainless steel is used everywhere in modern life from nuclear reactors to exhaust pipes, architecture, kitchenware and a host of other applications.

  

Specialty steels produced for applications such as tools, injection moulds, camshafts, etc, also derive the high mechanical strength, hardness and heat-resistance required from their chrome content.

Key statistics for 2015
• Global ferrochrome production reduced by 4.6% to approximately 10.7 million tonnes of ferrochrome
• Ferrochrome demand is expected to increase by approximately 1% in 2016
• South Africa produced approximately 35% of global ferrochrome production in 2015
• China consumed approximately 7.6 million tonnes of chrome ore in 2015 from South Africa

The South African
ferrochrome
environment

Increasing
production costs
are a challenge
Electricity costs have more than doubled since 2007 and labour costs are increasing, as are the challenges in the socio-political environment

Two South African
ferrochrome
producers filed for business rescue proceedings in 2015

   SOUTH AFRICAN CHROME INDUSTRY

Facts

35%
of world’s ferrochrome production supplied by South Africa in 2015
Over
72%
of world’s chrome reserves are in South Africa
Provides over
200 000
direct and indirect jobs
  Our competitive advantage
• Lowest-cost producer in South Africa
• Flexibility provided by variety of cost effective technologies
• 25% saving in energy consumption per tonne of alloy produced achieved as a result of major investments in energy efficiency (Lion Complex and two new pelletising and sintering plants)
• Lion II project ramp up in 2015 will achieve further energy efficiencies
• Significant chrome ore reserves and access to UG2