JOHANNESBURG (miningweekly.com) – The Proudly South African smelting technology that saves more than 70% of electricity consumption needed for smelting, reduces carbon emissions by about 60%, and puts users at the bottom of the cost curve, is now actual, factual and ready to enable South Africa to return to being an economically viable producer of ferroalloys – and green steel as well.

The technology that has the potential to help to re-industrialise South Africa is now ready to be commercialised and reverse the widespread closure of ferroalloy smelting operations owing to the high price of electricity.

To put South Africa back on the right track, the Johannesburg Stock Exchange-listed diversified mining company African Rainbow Minerals (ARM), headed by executive chairperson Dr Patrice Motsepe, has brought SmeltDirect to the fore to help South Africa to win back the market share that it has lost in the ferroalloy business it once led.

Unlike the 4 MW required by conventional systems, only 1.2 MW of electricity is needed to produce a ton of alloy, and some 700 jobs are created for every 200 000 t of alloy produced a year.

As a result, SmeltDirect has attracted global attention. Advantageously, SmeltDirect not only has all the attributes to reverse South Africa’s downward ferrochrome and ferromanganese slide but could even bring back the likes of Highveld Steel and Vanadium as well as open the way for a return of the local production of high-manganese rail and the introduction of green steel.

“We've gone way beyond the R&D phase now, and we've actually completed the full-on bankable feasibility study on making ferrochrome at Machadodorp Works,” ARM Ferrous CE Andre Joubert enthused in response to questions put to him by Mining Weekly at last week’s presentation of dividend-yielding financial year 2025 results.

ARM's Machadodorp Works, in Mpumalanga, is a facility focused on commercialising SmeltDirect to enable ores to be processed in the countries where it is mined, resulting in tons transported to markets being effectively halved.

In the early 2000s South Africa, which hosts more than 70% of the world reserves of chrome ore and manganese ores, was the undisputed No 1 chrome ore- and ferrochrome-producing country, with 90% of the inputs, including technology and equipment, locally sourced. More than 200 000 direct and indirect jobs were created across the chrome value chain alone and 20% of mining-related foreign exchange was earned from ferrochrome sales.

In 2010, the chrome value chain contributed R42-billion to South Africa’s GDP and generated R36-billion worth of foreign exchange earnings, with ferrochrome production contributing 80% of the value of the chrome value chain.

“We’re engaging with various partners in terms of partnering with us to commission such a new plant and commercialise our new technology, which saves more than 70% of electricity consumption if you want to produce the same amount of ferrochrome alloys, and it also reduces your carbon emissions by about 60% and it puts you on the bottom of the cost curve.

“So, we're doing a lot of work. We’re engaging with other chrome producers. We’re engaging with the Industrial Development Corporation of South Africa and also with various parties abroad in terms of commercialising this technology.

“But it's going to take quite a lot of effort, because chrome smelters are now shutting down, one after the other. We ourselves have cut our ferromanganese production. The last person left site at the end of August, so I think there's got to be a huge level of cooperation from an industry level and from government level so that we can reinvigorate industrialisation and smelting in South Africa.

“Another positive thing that we picked up from this research that we've done is that there's also very good application for this technology in terms of producing green steel and we’re even engaging with major steel producers at this point in time to advance that process, so it's very encouraging, and we’re making very good progress, but we’re not ready to announce a project at this stage,” Joubert pointed out.

SOLAR POWER

ARM was also questioned on its new approach to solar power.

Mining Weekly: Initially, when you decarbonised part of ARM Platinum's business, you built the solar yourself, and that self-generation of solar power will be coming in next year, but now that you're looking at solar again for your ARM Ferrous business, you’re wanting to buy solar power rather than build an embedded solar plant on site, so there's a different approach in that you're going to get your renewable energy from an independent power producer (IPP) rather than self-generate it yourselves.

Joubert: Regarding ARM Ferrous, or the Assmang side, in terms of the solar process, we completed a bankable feasibility study to build our own solar plant at our operations. But there are still too many questions to answer about the potential legislation and how Eskom is going to react now that everybody's building their own solar, which, to be fair to Eskom, can only supply electricity during the day, and then Eskom is going to still supply the power during the night. So, in that transition phase, there's still uncertainty about how Eskom is going to change tariffs, and because of that, we've decided to delay the installation of our self-built solar plant, and the IPPs have also come forward now with shorter-term contracts. You don't have to enter into 20-year contracts with IPPs anymore, so you can do a three-year contract or a five-year contract, and that's what we're going to do, to buy ourselves time, while still saving on our electricity cost and reducing our carbon emissions, so that we have more clarity on the legislation and the tariff structure of Eskom into the future.