SA mining company Assmang announced on Tuesday that it would proceed with the closure of its Cato Ridge Works (CRW) ferromanganese smelter in KwaZulu-Natal, putting 600 jobs on the line.
The closure comes as Patrice Motsepe’s African Rainbow Minerals restructures its manganese processing activities to cut costs amid persistently low prices and rising input costs.
Assmang, which mines iron ore, chrome and manganese in the Northern Cape, is jointly owned and operated by African Rainbow Minerals and holding company Assore.
The closure will see 310 permanent and 290 contract workers retrenched by end-August.
In a statement on Tuesday, the company blamed persistently weak manganese prices and rising input costs for CRW’s losses, with the price of electricity having risen more than 930% since 2008.
“The recent announcement of a potential electricity tariff reduction will not be sufficient to rescue this business,” said Assmang.
“Despite nonstop efforts to explore alternatives to closure, the operation has continued to experience significant financial losses which rendered CRW unsustainable,” it said.
Following the closure, the CRW complex is set to be converted into a “commercial and logistics hub”, with Assmang and Assore responsible for the cleanup and redevelopment.
The land and buildings will be purchased by Assore SA’s property division, providing Assmang with a R453m cash injection.
While closing down the struggling CRW, Assmang also announced that it had entered into an agreement to sell its 54.36% stake in Sakura Ferroalloys smelter in Malaysia, subject to certain conditions.
ARM, chaired by Motsepe, will receive R900m in cash when the deal has closed.
“The risk and benefit of the Sakura disposal shall pass to Assore SA with effect from the effective date of July 1 2024 even though legal ownership will pass on the closing date.
“Assore will also procure the release of Assmang from any obligations arising out of any suretyship, guarantee, indemnity, security or similar agreement that Assmang has entered into for the benefit of Sakura,” said ARM.
Earlier this year, ARM warned that retrenchments at its platinum mines may also be on the horizon.
Business Day reported in March that ARM had scaled back on mechanised development at its Bokoni Platinum Mines in Limpopo and would restructure the operation to stop the cash bleed in a low metal price environment.
In its latest interim results, ARM reported a 49% decline in headline earnings for the six months ended December 31 to R1.52bn or R7.75 a share, from R2.95bn or R15.07 a share.
Correction: July 2 2025
The headline and story have been corrected to reflect that CRW is a ferromanganese smelter.
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