JOHANNESBURG (miningweekly.com) – The results of the pilot testing of a new Proudly South African smelting technology, which lowers electricity usage and has the potential to render local ferroalloy beneficiation globally competitive once more, were described as “looking great” during question time at Merafe Resources’ presentation of 2024 financial results on Monday, March 10.

These words were uttered amid Merafe reporting that global stainless-steel production increased in the period, as did demand for ferrochrome, the feedstock on which it depends. Stainless steel is used almost everywhere in modern life, from nuclear reactors to exhaust pipes, architecture, kitchenware and a host of other applications.

South Africa’s major advantage is that it hosts most of the world’s chrome resources and chrome is regarded as a metallurgical major in the manner in which it brings critical properties to the metals with which it is alloyed.

Against that background, South Africa became the world’s leading ferrochrome producer at a time when South Africa was one of world’s lowest cost producers of electricity.

At one stage, installed ferrochrome capacity was 4.8-million tons. Getting back to that competitively would be of substantial benefit to the South African economy and should be implemented, many say, as part of a public-private programme.

London- and Johannesburg-listed Glencore owns 28.82% of Merafe and South Africa’s State-owned Industrial Development Corporation 21.88%.

Merafe has a 20.15% stake in the Glencore-Merafe Joint Venture, which produced some 1.5-million tons of ferrochrome in the 12 months to December 31 but has the capacity to produce considerably more with the right technology.

The Johannesburg Stock Exchange-listed company is currently reviewing smelting operations, leveraging technology for optimisation and cost reduction, and focusing on environmental sustainability, which includes a new solar plant.

Asked by an analyst about the extent to which the envisaged 100 MW renewables project would provide the venture’s power needs, assuming all 22 furnaces are operational, Merafe FD Ditabe Chocho responded that although it would be a fraction of what the smelters need to produce, it would be sizable enough to make a difference towards cost reduction and decarbonisation.

“Our total requirements, from a smelters point of view, are in the region of 800 MW to 900 MW,” Chocho added.

Pilot trialling to date has indicated that by retrofitting Proudly South African SmeltDirect to smelters can slash their electricity requirement by up to 70%, take them to the low end of the cost curve, and render them far more environment-friendly.

In the meantime, South Africa’s once leading status in the global ferrochrome field has been reduced to having to export increasing volumes of raw ore and decreasing volumes of ferrochrome, which is of considerably higher valued and which is easier to transport.

SmeltDirect is seen as potentially being able to put the emphasis back on not only value-added ferrochrome production but also ferromanganese and other ferroalloys.

Merafe reiterated during question time, after presenting a 62% decrease in basic earnings per share to 26.7c, its preference is to convert chrome ore into value-adding ferrochrome.

“Our first prize will always be to convert the chrome into ferrochrome because we believe, from a South African perspective, ferrochrome production should happen in South Africa,” Glencore Operations South Africa CEO Japie Fullard emphasised in reply to an analyst.

Asked by Mining Weekly about the trialling of the new SmeltDirect technology, which some say has the potential to restore South Africa to its former ferroalloy glory, Fullard was called upon by Chocho to respond and this is what he said: “I'm sure you’re well aware of the SmeltDirect concept, and, as Ditabe said, the PSV did enter into an NDA with IP producers of SmeltDirect,

“I can also add that our team, from a technical perspective, spent the whole of last week at the operation where we investigated the pilot, and indeed the pilot results are looking great.

“So, we’ll very quickly, within the next couple of months, understand if we can upscale the pilot process into a commercial perspective.

“I think it's very important to note that it’s a medium-to-long-term solution. Obviously, we must guard against claiming a 70% lower electricity requirement and those type of things.

“Is it better from an electricity point of view? Yes, indeed, it is. And these are the type of concepts that we are testing and I must say that the partnership that we've got with the IP company, a Proudly South African company, is really working well. We are really working together well so that we can see if we can get to a solution.

“If we can continue to convert chrome into ferrochrome in South Africa, that’ll always be our first priority.

“We need to do this for South Africa. South Africa needs beneficiation, and we’ll do whatever we can, as the PSV, to bring our side, to always try to curb job losses, and also promote the multiplier effect of beneficiation.

“So, definitely, the outlook is that after our test period, and after we’ve had our conversations with our partner, we’ll then put this into a commercial perspective.

“Then we’ll add financials. We’ll add capital costs. You can just imagine that there's quite a huge amount of capital injection that we require, and we must be 100% sure that this technology can be taken from a pilot to a commercial perspective. So that's definitely the outlook that we've got,” Fullard outlined.

In the right circumstances, some of the idled ferrochrome smelters in five geographical complexes, where there are 22 in all, could be restarted relatively quickly, and the one singled out was the Rustenburg smelting complex: “Rustenburg smelting is on hot care-and-maintenance, so we will be able to restart fairly quickly if we do get incentives to do so,” Fullard added.

Although South African ferrochrome production increased by 3% in 2024 when power supply was stable, it is expected to decline in 2025 despite the new electricity pricing agreement with Eskom, effective from January.

“Our focus will be on the business review, and as soon as we've concluded that, we'll then come back to the market with what the direction is,” Merafe CEO Zanele Matlala promised.

Knowledgeable visitors from around the world have given the fully operational SmeltDirect demonstration plant at ARM’s Machadodorp Works a firm thumbs up.

The strong belief is that if South Africans work together in a new return to local ferroalloy production, there is a potential for the country to return to being a valuable contender in competitive ferroalloy production.

SmeltDirect is able to process fines, slimes and carbonate manganese ore, ensure that large volumes of ore are able to leave the country in a beneficiated form and provide a platform for South Africa's re-industrialisation.