In October, Roskill visited the heart of the chromium industry: the Bushveld Igneous Complex (BIC) in South Africa. Around 60% of mined chromium is supplied from chromitite seams of the BIC, with the majority of ores and concentrates mined from the Lower Group (LG) and Middle Group (MG) chromitites as primary chromite. A growing volume of concentrate supply is recovered as a by-product from platinum group metal (PGM) tailings of the Upper Group 2 (UG2) chromitite. Roskill has mapped out 20 operational UG2 tailings chromite wash plants that account for the roughly 6Mt of UG2 chromite supplied annually. In addition to UG2 wash plants, multiple small wash plants are dotted across the countryside to reprocess LG and MG tailings or any ores that the plant operators can get their hands on (some via tolling agreements with major producers).
Much of the growth in chromite supply from South Africa is servicing the Chinese ferrochrome and stainless steel industry, which has geared itself to consume large volumes of chromite fines from South Africa. After the COVID-19 pandemic caused a short-lived lockdown in China and saw a rapid recovery in industrial production, the attention turned to the rest of the world as the virus spread and governments imposed lockdowns. For chromium (and manganese) that attention was focused on South Africa. However, the lockdown had limited impacts on mine supply, with many producers facing an adjustment period to incorporate COVID-19 screening, sanitising and social distancing procedures into their mine operations, then managing to ramp up back to capacity. This was more difficult at large underground operations and many are only expected to return to capacity by the end of Q4 2020. In situ tailings retreatment operations, with relatively low labour forces, were by and large able to continue to operate unhindered, except for export logistics.
Transnet, South Africa’s national transport utility, operates the rail network and has struggled to keep pace with the growth in mineral exports from the country. Manganese ore exports, which were earmarked to leave via the Port Elisabeth port and delays in construction at the Coega port, have seen material exit via all main South African ports. These materials now compete with chromium for capacity at rail sidings and at port. Similarly, chromite mined in the eastern Bushveld has seen larger volumes moved across the land-border to Mozambique for exporting from Maputo, which also benefits from a shorter mine-to-port distance. Furthermore, the rising volumes of chromite supply from both the western and eastern Bushveld have grown the use of trucking routes to get material to port, as rail capacity remains limited.
During the COVID-19 outbreak in South Africa, logistics routes were quickly impacted and intermittent closures disrupted rail freights reaching Richards Bay and Durban. For the trucking routes, a slowdown in imports into South Africa has meant higher volumes of empty in-land journeys and increasing trucking rates have caused producers and traders to be creative in getting material to port at the lowest cost possible. Smaller producers without consistent and contracted rail volumes are seeing growing stocks at mines and trucks lining up at the gates to load 34t at a time. The border post to get to Maputo continues to be a bottleneck with the transit time to cross the border making the route less economical and seeing additional material diverted to the South African east coast ports. Nevertheless, South African exports of chromium ores and concentrates have returned to over 1 million tonnes per month after a short-lived drop in April.
Roskill published its first update to the Chromium: Outlook to 2030, 16th Edition report in September 2020 and is developing its NEW Chromium Cost Model Service for release at Roskill’s inaugural Steel Alloys South Africa conference in January 2021 in Johannesburg.