Diversified mining group Tharisa has moved to ease chrome market jitters in its latest annual results by emphasising the critical mineral’s strong demand outlook.
The company said it remained bullish on chrome even as crime and electricity prices continued to erode South Africa’s global competitive position.
“With the stainless-steel market in the Far East needing close to 2-million tonnes of chrome concentrate a month and the industry projected to grow at some 3%, the fundamentals for chrome remain strong,” said the group.
“South Africa’s chrome and PGM industries are well positioned to benefit from structural global demand for stainless steel, renewable technologies and green-economy metals.”
SA has 70%-80% of the world’s chrome ore reserves, a critical mineral used to produce ferrochrome, a steelmaking ingredient.
The comments come as illegal chrome mining, double-digit electricity tariffs and tight Asian competition have seen a number of local chrome smelters closing down in recent years, threatening to pressure domestic coal mining in turn and putting chrome at the centre of South Africa’s critical minerals debate.
Last month, the Glencore-Merafe chrome venture said it was proceeding with about 2,500 retrenchments at shuttered smelters across the country. The venture, which produces roughly a third of South Africa’s annual exports, had already let go of 1,800 workers in the past four years thanks to unsustainable electricity costs.
Tharisa is a major player in global chrome supply, accounting for about a tenth of China and Indonesia’s demand for the metal each year, with China its biggest customer.
The group’s bullish outlook on chrome also represents a shift in sentiment from the March quarter, when CEO Phoevos Pouroulis warned that US tariffs on China might hurt demand for the group’s chrome and PGMs this year.
For the year ended September, Tharisa reported a 16.4% decline in revenue to $602.9m, while operating profit rose 5% to $125.6m. HEPS eased to 26.7c from 27.7c a year ago.
The company is optimistic that urbanisation and infrastructure investment will continue to support a stable growth trajectory in stainless steel manufacturing and chrome consumption, particularly in China.
“Maintaining competitiveness will, however, rely on addressing systemic infrastructure issues, embracing technological advancements and ensuring that the industry meets rising stakeholder expectations around responsible mining,” it said.
“The industry’s ability to dynamically adapt to market transitions will remain a defining feature of its contribution to national economic development and global supply security.”
The group produced 1.56-million tonnes of chrome concentrate in the year to end-September, 8.2% less than the previous financial year. It expects to produce roughly the same amount next year, with production guidance set between 1.5-million and 1.6-million tonnes.
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