Acquisitive Ruukki's South African investment hits R3bn, JSE listing likely
0 COMMENTS | COMMENT PRINT EMAIL |
By: Martin Creamer
10th November 2010
TEXT SIZE
JOHANNESBURG (miningweekly.com) – The Helsinki- and London-listed Ruukki, which has invested R3-billion in South Africa so far, will soon have two assets and two major projects to manage in this country, which it believes has "huge potential".
Ruukki South Africa CEO Dr Alistair Ruiters, a former South African Department of Trade and Industry director-general, says that the company's investment is already sustaining close to 500 direct jobs and 2 000 indirect jobs.
Ruukki Minerals CEO Dr Danko Koncar – the company's leading light who sold Kermas' interest in South Africa's large Samancor chrome business to International Mineral Resources of London – adds that chrome mining, ferrochrome production and pig-iron production will feature strongly in the company's South African activities.
Koncar reiterates that a secondary JSE listing remains under serious consideration.
"We listed in London in July, and we can use the same documentation for a listing on the JSE," Koncar, a Croatian national who was part of South African President Jacob Zuma's recent China visit, tells Mining Weekly Online.
Ruukki's primarily listing is in Finland, where the company originated and where it still has a wood business, which is to be sold off.
Ruukki chairperson Dr Jelena Manojlovic tells Mining Weekly Online that the company is planning to devote "a lot of our energy, investment and time to developing further business, acquiring assets, constructing new capacities and becoming a much bigger player in the South African economy".
"South Africa has huge potential and that's why we are here and putting Ruukki money into the country, together with our partners," Manojlovic adds.
Ruukki's southern European minerals business consists of mining and beneficiation operations in Turkey, chromite concentrate processing operations in Germany, and procurement and sales operations in Malta.
"Soon we'll have two South African assets and two major projects to manage, and we're going to make two further investments, in power and furnaces, which is a strong signal of our confidence in the country," says Ruiters.
Ruukki, which bought the Mogale Alloys business in 2009, has entered into agreements with Metallurgical Group Corporation (MCC) of China for the construction of two China-financed direct current (dc) chrome furnaces, as well as the construction of a power plant.
Large pictures of the design of the two new dc furnaces were displayed a function in Johannesburg, attended by the full Ruukki board on its first visit.
Koncar – whose name is regularly also spelt Konchar – envisages that ten such dc furnaces could be built in South Africa.
The company believes that owning a power plant is critical for its growth plans, in order to ensure a consistent supply of power to its furnaces at a competitive rate.
Ruukki director Chris Pointon, a former BHP Billiton stainless steel materials president, tells Mining Weekly Online: "We need consistency of power supply and predictability of power price."
Pointon adds that the ideal configuration is to build the power supply in a coalfield and to build the chrome furnaces as close as possible to the chrome mine, "because the most expensive thing in South Africa, which will increase going forward, is transport, and particularly road transport".
Power will be needed for the two dc furnaces at the mine site in North West province, as well as for two new furnaces planned at the existing Mogale operation in Gauteng province.
In June, the company said that each of the dc furnaces would require power of 70 MW to operate, while the existing furnaces at Mogale require a combined 100 MW to operate.
It is envisaged that MCC will be contracted to build up electricity capacity incrementally on an as-needed basis using off-the-shelf modular power plant.
"The fact that we are building our own power station does not mean that we are an alternative to Eskom in terms of power supply. Eskom is still fundamental to our business, but the issue in all of this is to have power security and power price security, which means having alternatives," Ruiters explains.
Synergy Africa, a Ruukki-Kermas joint venture, has extended, to November 29, the deadline of its £37-million cash takeover offer for the Aim-listed chrome-mine-owning Chromex.
Synergy Africa was established specifically for the purpose of acquiring Chromex and has acceptances for 83,74% of Chromex's issued share capital and 92,2% of the total Chromex warrants in issue.
The plan is for chrome production to be significantly increased at mine level to meet the needs of the dc furnaces.
The chrome ore is there. All that is awaited is the processing plant to beneficiate the ore to ferrochrome.
Completion of the construction of the furnaces and the power plant is expected by 2012 or 2013.
"We can buy prospecting rights, but it is better to buy existing mines and increase their production, as we intend doing. We will invest to increase the production," says Koncar.
South Africa's chrome orebodies are far larger than the orebodies in Turkey, where Rukki has a relatively small operation that produces 100 000 t a year, which is likely to be increased to 250 000 t a year.
Turkey supplies the company's Electrowerk Weisweiller factory in Germany, which was established in 1905 and which is probably the oldest ferroalloys factory in the world.
Ruukki also has the Veremo iron-ore joint venture with the JSE-listed Petmin, which is headed by former Anglo American executive Ian Cockerill, who was also present at the function, as was former Anglo American executive Philip Baum, now on the Ruukki board.
Kermas owns 75% of Veremo, which owns the Stoffberg project in Mpumalanga province; Petmin owns the remaining 25%.
Korean firm Dongbu Steel and South Korean State-owned mining company Kores have signed a memorandum of understanding with Kermas to develop a 1,2-million ton a year pig iron project in South Africa by 2013. The parties have agreed to sell a collective 49% of Stoffberg to the South Korean firms.
Dongbu Steel will have access to one million tons a year of the pig iron output, and the remaining 200 000 t will be sold on the open market.
As the Stoffberg resource contains both iron-ore and titanium, processing plants will be developed in two phases. As part of phase one, the smelter will be built to process iron-ore into pig iron.
A processing plan for the titanium oxide slag is still under consideration as part of a second phase.
Ruukki South Africa is likely to be made up of four different units, namely the proposed Chromex unit, the dc furnace unit, Mogale and the iron-ore unit.
The group's aim is to become a vertically integrated mine-to-metals producer.
It is involved in the processing of ore concentrate and raw ore into a range of products, including specialised low carbon and ultralow carbon ferrochrome, charge chrome ferrochrome, silico manganese and chromium/iron/nickel stainless steel alloy.
Its revenue in the first half of 2010 more than doubled year-on-year, mainly owing to the South African product sales from Mogale.
The demand side points to considerable scope for increased ferrochrome production against the background of China currently consuming only between 7 kg and 8 kg of stainless steel a person, compared with the likes of Taiwan, where consumption is 40 kg a person, and Japan, where concumption is 39 kg a person.
Edited by: Creamer Media Reporter
TOPICS IN THIS ARTICLE
City Company Continent Country
Helsinki
Johannesburg
London
BHP Billiton
Dongbu Steel
Eskom
International Mineral Resources
Metallurgical Group Corporation
Mogale Alloys
Petmin
Ruukki Group Minerals
Ruukki South Africa
Stoffberg
Synergy Africa
Veremo
Africa
China
Finland
Germany
Malta
South Africa
Turkey
Facility Industry Term Person Programming Language
Electrowerk Weisweiller Factory
Chrome Mining
Energy
Mine Site
Mining
Steel
Transport
Alastair Ruiters
Chris Pointon
Danko Koncar
Ian Cockerill
Jacob Zuma
Jelena Manojlovic
Philip Baum
DC
Province Or State
Gauteng
Mpumalanga
PRINT EMAIL
HIDE COMMENTS
THIS ARTICLE CONTAINS NO COMMENTS
CANCEL COMMENT
All comments must be approved by our editors, click here to read the EDITORIAL GUIDELINES FOR COMMENTS. Please allow some time for our editors to approve your comment after posting.
* Required Fields
*
Stay Anonymous
*
* Please enter the text you see in the above image.
Subscribe me to the Free Daily Email
SUBMIT COMMENT
Picture by: duane daws
RUUKKI SOUTH AFRICA CEO DR ALISTAIR RUITERS
RELATED ARTICLES
ARTICLES|AUDIO|VIDEO
Ruukki-Kermas JV extends offer for Chromex
Ruukki studies 250-MW plant to supply Mogale Alloys
Kermas aiming to have its prospecting permit converted...
Kermas to apply for mining licence in South Africa
No comments:
Post a Comment