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

Facts

Approximately 3.6mt of the world's ferrochrome production of 14mt was supplied by South Africa in 2019

Over 72% of the world's chrome reserves are in South Africa

Provides approximately 200 000 direct and indirect jobs

Challenges faced by South African ferrochrome producers

  • Increasing production costs
    • electricity
    • labour
  • Socio-political challenges
  • Legislative uncertainty
  • Commodity prices and demand
  • Chrome ore exports
  • Electricity supply
  • Logistics