ARM to build R700m furnace
AFRICAN RAINBOW MINERALS (ARM), SA’s largest mining empowerment company, is considering the merits of spending up to R700m expanding its Cato Ridge ferromanganese facility. Jan Steenkamp, MD
of ARM’s ferrous metals division, says the expansion may get a board ruling in July.
If approved, ARM will add a seventh furnace to the KwaZulu-Natal facility, taking production about 80 000 tons/year higher to about 300 000 tons/year of high carbon ferromanganese alloy.
Though it sounds arcane, ferromanganese is used in making steel and feeds directly into China’s growth story.
“At the moment, we’re just twiddling our thumbs waiting for Spoornet to give us an answer on the rail tariff,” says Steenkamp. “There are indications it will be next month.”
The development also helps ARM tick a box in beneficiation, an old chestnut Government has adopted.
Another consideration is whether the market can support more production of this metal. The manganese market is small, dominated by a handful of companies and easily disturbed.
One final issue, however, is whether ARM can support the additional balance sheet stress. Steenkamp thinks it can, but it’s worth noting that ARM’s ferrous metals division is currently financing the R3,8bn development of an iron ore mine. An expansion of the mine could cost another R2bn.
Just twiddling his thumbs. Jan Steenkamp