UAE based businessman, Mr Alibek Issaev, whose group of companies include growing global software business Dudu Communications, acquired a 50% stake in FerroChrome Furnaces (Pty) Ltd (FCF), a South Africa based producer of low and medium carbon ferrochrome for the export market.
The international alliance is set to challenge global monopolies in the global supply of the metal. We aim to corner the low and medium carbon ferrochrome supply markets during the next two to three years, and if that means a price war to achieve market share, we are ready to do battle and we have the resources to do so, said Mr Alibek Issaev.
Venmyn Deloitte, a division of Deloitte worldwide, with professional expertise in the independent technical and economic assessment and review of mineral projects, conducted a two-year due diligence study to determine the viability of the project and has evaluated FCF business at $1.7 billion USD.
As a globally-significant resource, there is considerable upward demand for low and medium carbon ferrochrome worldwide. Whilst China is unofficially the largest producer of low and medium carbon ferrochrome, its production is mainly for domestic use. Hence, the remainder of the market is fair game. To meet global demand, FCF will be
able to increase production capacity to 420,000 tons per annum over the next 24 months. This will make it the largest producer of low and medium carbon ferrochrome in the country.
FCF spokesman Mr Ashruf Kaka said the alliance assures access to hitherto closed UAE business interests and will fast-track the firms aggressive expansion ideals. An international partner such as Mr Issaev places FCF at the forefront of the competition with two other overseas competitors, and will make us the biggest exporter of low and medium carbon ferrochrome within the next three to four years. FCF, a privately owned company, has one of the first private beneficiation smelters of low and medium carbon ferrochrome in South Africa.
Electricity costs are making ferrochrome beneficiation increasingly expensive globally. FCFs efficiency of electric and thermal energy, its utilisation of AOD & VOD technology, proximity to raw materials, availability of efficient logistics and the strong dollar against a weaker rand help to favourably position itself in the global pricing market. This situation also lends itself to become not only the worlds largest low and medium ferrochrome producer, but also the lowest cost per ton producer of low and medium ferrochrome worldwide.
The deal was struck between Mr Issaev and South African businessman Mr Abbas Moti. The Moti family already has considerable experience in mining technology through its involvement in Kilken and Global Tailings Solutions (GTS), a platinum beneficiation plant at the Amandelbult mine at Thabazimbi, owned by Rustenburg Platinum (Rustplats), a subsidiary of Anglo American.
Mr Abbas Moti said the establishment of the production facility has already created significant opportunities for the local community and the accelerated expansion will add 3000 new jobs directly and indirectly.
This is in line with the South African Governments macro-economic plans for job creation and community development, and will further benefit our balance of payments. South Africa has traditionally exported raw materials for beneficiation offshore, and then re-importing refined materials at high cost. The South African ferrochrome industry has requested the SA Government to levy taxation of 100 dollars per ton of chrome ore for raw ore export to encourage beneficiation locally. FCF supports this decision and encourages local beneficiation.