Tharisa goes big on PGMrich metals via Arxo branch

THARISA Minerals, the JSElisted platinum group metals (PGM) and chrome producer, said yesterday that its subsidiary, Arxo Metals, was scheduled to commission a 1m/W DC furnace to produce PGM-rich metal alloys on a pilot scale at the end of September.

It would take about six months to ramp up to a production of PGM-rich metal alloy, which would be smelted by Lonmin, the world’s third biggest platinum producer as part of a PGM research and development co-operation agreement entered into on July 19, Tharisa chief executive Phoevos Pouroulis said.

“The PGM research and development co-operation agreement is in line with the group’s strategic objective of moving down the value chain. Tharisa and Lonmin have a good relationship and we are pleased to be working together to our mutual benefit,” said Pouroulis.

Beneficiation The production of PGM-rich metal alloys was expected to further develop the company’s beneficiation capability and boost the profitability of its PGM segment, the company said.

Tharisa operates a shallow and large-scale open pit PGM and chrome mine in the North West and Arxo Metals is the group’s beneficiation, research and development subsidiary.

Sibonginkosi Nyanga, an analyst at Momentum Securities, said yesterday that the furnace would be positive if it was successful as South Africa was currently exporting raw materials.

“Tharisa is going to beneficiate the chrome. As you know, beneficiation fetches better prices than just exporting raw materials. If this exercise is successful, some producers may use Arxo to beneficiate their chrome produce.

“The furnace also can help countries in the region, which also exports raw resources,” Nyanga said.

Increased stainless steel production had been the driver of improved ferrochrome prices above $200 a ton.

Earlier yesterday, Tharisa said Arxo had penned an agreement with Lonmin, to operate its K3 UG2 chrome plant (K3) in a bid to boost sales, market and sell the UG2 chrome concentrate produced at the operation.

Arxo Metals was expected to use innovative technology in use at Tharisa Minerals operations where chrome recoveries for the six months ended March 2017 had improved to 68.4 percent with a target recovery of 65 percent to unlock greater value for Lonmin from K3.

Pouroulis said that the agreement which was effective as of August 29 was in line with the company’s strategic objective of initiating third-party trading, and added around 200 000 tons to chrome sales annually.

“The marketing and sales of UG2 chrome from K3 expands the basket of chrome concentrates sold by Tharisa and leverages off its established logistics and marketing platforms,” said Pouroulis.

Contract Last month Tharisa announced that it had entered into a five-year contract to supply Chinese stainless steel producer, Taiyuan Iron & Steel Company (Tisco), which produces 4 million tons of stainless steel a year with 240 000 tons of chrome concentrate a year.

The supply agreement is scheduled to begin this month.

The deal represented about 25 percent of Tharisa’s forecast for the 2017 production of 1 million tons of metallurgical grade chrome concentrate, the company said.

Increased stainless steel production had been the driver of improved ferrochrome prices with spot currently being above $200 (R2 601) a ton.