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
OUR COMPETITIVE ADVANTAGE
- Lowest-cost producer in South Africa
- Flexibility provided by variety of costefficient technologies
- Savings in energy consumption per tonne of alloy produced as a result of major investments in energy efficiency (Lion Complex and two pelletising and sintering plants)
- Lion II achieves further energy efficiencies
- Significant chrome ore reserves and access to UG2
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 critical 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 and shiny. Stainless steel is used almost 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 2019
- Global ferrochrome production increased from 13.6 million tonnes in 2018 to approximately 14 million tonnes in 2019.
- Ferrochrome demand increased from 13.3 million tonnes in 2018 to 13.7 million in 2019.
- South Africa produced approximately 3.6 million tonnes of ferrochrome in 2019 (2018: 3.9).
- China imported approximately 79% of its chrome ore in 2019, from South Africa (2018: 76%).
SOUTH AFRICAN CHROME INDUSTRY
Approximatelyof the world's ferrochrome production of 14mt was supplied by South Africa in 2019
Overof the world's chrome reserves are in South Africa
Provides approximatelydirect and indirect jobs
Challenges faced by South African ferrochrome producers
- Increasing production costs
- Socio-political challenges
- Legislative uncertainty
- Commodity prices and demand
- Chrome ore exports
- Electricity supply