JSE-listed Mantengu Mining has acquired Masorini Iron Beneficiation’s (MIB’s) iron beneficiation plant in Phalaborwa, Limpopo, for R18.97-million.

Mantengu says this strategic move positions the company to become a leading producer of high-quality, low-cost metallic iron, addressing critical gaps in the scrap metal supply chain and capitalising on the growing demand for sustainable steel production.

The acquisition comes after MIB was placed into final liquidation in July 2024.

Park Village Auctions & Property Sale was tasked with auctioning off MIB’s assets and Mantengu emerged as the successful bidder.

Mantengu describes the iron plant, which uses innovative technology to convert superfine iron-ore into high-grade metallic products using low-cost thermal coal, as a “game-changer” for the industry.

Its modular design allows for deployment at strategic locations, significantly reducing production costs related to feedstock, logistics and energy consumption while maintaining lower emissions compared to traditional iron-making processes.

Mantengu says the acquisition is unconditional, reflecting the company’s confidence in the asset’s potential to drive value for its shareholders and contribute to sustainable industrial practices.

“The iron plant will produce high-grade iron units at the lowest end of the production cost curve, creating significant value for our shareholders while addressing environmental risks associated with superfine iron-ore.

“This acquisition aligns with our vision to lead the metallic iron production space and provide a high-quality, low-cost scrap supplement to the global steel industry,” says Mantengu CEO Mike Miller.

The global steel market, valued at $1.55-trillion in 2024, is projected to be valued at $2.6-trillion by 2034, driven by increasing demand for sustainable steel production.

Steel plants worldwide rely on scrap metal as a key raw material, making scrap supplementation a critical component of the industry. However, supply shortages and rising prices have created a pressing need for innovative solutions.

Mantengu says this acquisition positions the company to fill this gap, leveraging MIB’s innovative technology to produce metallic iron units efficiently and sustainably.

The company notes that MIB, previously owned by Iron Mineral Beneficiation Services (IMBS) (62.70%) and the Industrial Development Corporation of South Africa (IDC) (37.30%), had faced financial challenges, with audited equity standing at a negative R203-million as of  December 31, 2020.

Despite this, the iron plant and machinery, carried at R210-million in the 2020 financial statements, are worth significantly more today.

Mantengu’s board believes the asset’s potential far exceeds its historical cost valuation, particularly given its ability to process 240-million tons of waste iron-ore in Phalaborwa.

MIB’s proprietary technology, which eliminates the need for costly agglomeration and uses thermal coal efficiently, has been independently verified by industry leaders such as Tenova, a global supplier of innovative iron-making solutions.

The technology’s ability to produce high-quality metallic iron with lower emissions positions it as a sustainable alternative to traditional methods, aligning with global trends toward greener industrial practices.

Looking ahead, Mantengu says it plans to explore further opportunities to expand its footprint in the metallic iron sector.

The joint liquidators of MIB are considering a Section 155 compromise under the Companies Act to restructure the company’s financial obligations and to take it out of liquidation.

If approved, Mantengu intends to acquire IMBS’s 62.70% stake in MIB for a nominal value, further consolidating its position in the market.

The company also views the IDC as a crucial stakeholder and is committed to collaborating with the development corporation to grow MIB’s business.

“We see immense potential in this acquisition and look forward to working with the IDC to unlock value for all stakeholders,” Miller adds.

Mantengu says its strategic move comes at a pivotal time for the steel industry, as manufacturers increasingly prioritise scrap-based production to reduce costs and environmental impact.

“By positioning itself as a leading producer of metallic iron, Mantengu is not only addressing a critical market need but also contributing to a more sustainable and efficient steel production ecosystem.

“With its innovative technology, strategic acquisitions, and commitment to sustainability, Mantengu is poised to revolutionise the metallic iron industry, creating jobs and driving economic growth for Phalaborwa, and setting new standards for environmental responsibility in the mining and metals sector,” says Miller.

Mantengu executives include chairperson Jonas Tshikundamalema and group CFO Magen Naidoo.