Eskom reform urgent to restore ferrochrome potential – by Martin Creamer (Engineering News – March 12, 2019)

http://m.engineeringnews.co.za/

JOHANNESBURG (minngweekly.com) – The demise of State power utility Eskom has caused South Africa to lose its optimal position in the lucrative ferrochrome business.

Because of Eskom’s decline, unbeneficiated chrome ore exports from South Africa to China have enabled the Asian giant to ascend up the ferrochrome production ladder. As reported by the Johannesburg Stock Exchange-listed chrome and ferrochrome company Merafe Resources on Monday, 76% of the chrome ore imported by China last year came from South Africa.

Merafe shares in 20.5% of the earnings before interest, taxation, depreciation and amortisation of the large Glencore-Merafe Chrome Venture, the world’s second lowest cost producer.

If upper group two (UG2) resources are included, South Africa has more than 80% of the world’s chrome resources but is unable to turn that endowment to optimal account because of Eskom’s problems.

On the carbon tax front, considerable relief has been provided until 2022, which is one of the recommendations the ferrochrome industry put forward in an eight-page solution. But electricity availability and at competitive cost remain the obstacles in the way of re-ignition of the significant latent socioeconomic boost that a ferrochrome revival can offer the South African people.

For the rest of this article: http://m.engineeringnews.co.za/article/eskom-reform-urgent-to-restore-south-africas-ferrochrome-potential-2019-03-12

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