ASA Metals (Pty) Ltd: The benefits of overseas partnership

Demand for South Africa’s natural resources has always been a draw for overseas parties. Increasingly, Chinese companies have looked to invest in South Africa in return for mining rights, often providing much needed investment and forging key partnerships.

ASAOne such partnership is the joint venture between East Asia Metals Investment Co. Ltd.(EAMI)  and Limpopo Economic Development Enterprise (LimDev), culminating in the creation of ASA Metals (Pty) Ltd. in November 1996.

EAMI is a 100 per cent subsidiary of Chinese giant Sinosteel Corporation, based in Beijing, owning 60 per cent of the shares in ASA Metals, with LimDev holding the balance.

ASA Metals was set up to mine the Dilokong Chrome Mine situated against a hillside and located roughly 30 kilometres from Burgersfort on the R37 to Polokwane. Whist the history of ASA Metals might be relatively brief, the mine supersedes the business by 30 years, having been founded as a Government training mine, prior to ASA Metals obtaining the full shareholding.

The Dilokong Mine’s location is significant – sited on the eastern rim of the lucrative Bushveld Igneous Complex (BIC). It is reported that approximately 83 per cent of the world’s currently mineable ore reserves are found in the BIC.

The BIC itself is saucer-shaped and located in northern South Africa. Chromite ore, such as is found at Dilokong Mine, is mined along both the eastern and western rims of the complex.

South Africa’s importance as a producer of chromite ore is unquestionable, with world production at around 14 million tons, the nation is responsible for about 39 per cent.

Whilst the BIC contains numerous chrome seams, existing market prices and the cost of extraction at present, mean that only 2 are economically viable.

The respective seams are reportedly very consistent throughout the BIC in both physical and chemical nature. The lower of the two is referred to as the LG6 (lower group 6) seam and is approximately 1.1 to 1.3 metres thick. The chrome content within this seam is considered the higher of the two, at between 43 and 47 per cent Cr2O3.

The MG1 (middle group 1) seam is located above the LG6 seam and is a little thicker, ranging from 1.6 to 1.8 metres metres thick.

In relation to the Dilokong Chrome Mine, ASA Metals only mines the LG6 seam, dipping between 16° and 9°.

The company uses conventional scraper mining methods to reach the ore, which is drilled and blasted before being scraped mechanically to loading points, where it is moved to the shaft tips in hoppers, pulled by locomotives. From there the ore is brought to the surface by conveyor belts which have been installed in the incline shaft.

Once at the surface, the ore goes through a series of processes aimed at sizing, classifying and separating, which helps to remove any pyroxenite waste from the chromite.

At this point, any foundry sand created during the production process is stockpiled for export, while the lumpy chromite and metallurgical concentrates are transported to ASA Metals’ smelter.

Meanwhile, at the smelter, charge chrome is produced through a single stage process by smelting a mix of chromite, reductant and fluxes at temperatures in excess of 2000°C.

Today ASA Metals operates at Dilokong with 2 smelters and is able to produce charge ferrochrome with an annual capacity of 120,000 Mt. The finished product is typically earmarked for export, with ASA Metals selling to Japan, Europe, China, Korea and Taiwan.

Backed with its foreign investment, in 2009 the company had added 2 further closed smelting furnaces of 66 MVA and a 600,000 ton per year pelletising and sintering plant.

Electrical energy has to be applied to the furnaces for the desired chemical reaction to take place and the molten waste slag and metallic charge chrome are drained on a regular basis (from the smelting furnaces) and separated via skimmers.

Once the metal ingots have cooled, a crushing and screening beneficiation step takes place which enables the production of sized charge chrome. This in turn is then prepared for the world’s stainless steel markets.

Whilst Dilokong is a hive of industry today, its days looked numbered until ASA Metals assumed mining rights. Dilokong had previously supplied chromite ore to various local smelters for the production of charge chrome, used in the production of stainless steel. South Africa produces roughly 39 per cent of the world’s chromite.

At the same time, small volumes of foundry sand were also produced at Dilokong and were supplied to various South African and international customers. However, the South African charge chrome producers were aware of the strategic importance of chromite resources and began a process of vertical integration, aimed at establishing their own chromite mines. Consequently, the long-term sustainability and future viability of Dilokong Chrome Mine were brought into question.

With the mine under threat, the formation of ASA Metals changed its fortunes for the better, providing an expansion programme for the chromite mining operation into a vertically integrated charge chrome production facility.

The attraction of the Dilokong mine is not hard to envisage; the chrome mine has a reported chrome ore mining capacity of 400,000 mt with established ore reserves in excess of 50 million tons.

The mine’s produces is typically lumpy ore, chrome concentrate and foundry chrome sand – the latter product being used for foundry mould, refractory and nozzle sand.

With the world’s consumption of stainless steel unrelenting, Chinese investment at Dilokong has created a long-term future for ASA Metals.