Avalloy seeks breakthrough year

[miningmx.com] — BENEFICIATION and skills development are at the core of independent junior superalloy producer Avalloy’s growth strategy, CEO Alan Bissell said on Wednesday.

The little-known company has an operating plant on the Nuclear Energy Corporation of South Africa’s premises at Pelindaba with a capacity to produce up to 4,000 tonnes per year of superalloy in various grades and product from.

“The raw material comes into the plant and it goes through a refinement process chain, with the end product being alloy bars which are then sold to various customers,’ said Bissell.

Avalloy produces a range of superalloy using locally and internationally sourced minerals and other material. Superalloys are iron-, cobalt- and nickel-based. They are primarily used in aircraft engines, turbo superchargers in vehicles and medical instruments.

The plant has about 50 employees and a graduate training programme.

“We are committed to running this facility with local people and transferring skills from one person to another, considering that they did not previously exist in South Africa.’

He said the company expected production to be at its highest this year, after a couple of years of breaking even and building up the order book.

“Avalloy is now well positioned to take advantage of current and future demand, which is evident in our book over the last few years.’

Bissell added that demand for superalloy, used for high performance alloys such as those in Airbus aeroplane engines, was growing at 5% to 6% per year, which means there is room for the business to expand.

Avalloy exports almost all its finished products to markets such as Eastern Europe, the US and Asia. Sectors which use its products include aerospace, industrial gas turbine or power generation, automotives, oil and gas, and the nuclear and engineering fields.

Government backing

Avalloy is owned by Basileus Capital, which has a majority stake of 55%.

Rolls Royce, also a customer, holds 13% as a strategic partner while the Industrial Development Corporation recently acquired 10%.

“We received a lot of support from the department of trade and industry,’ said chairperson Julian Williams.

Avalloy was initially a unit of Anglovaal Mining, now African Rainbow Minerals (ARM).

The company’s plant and top of the range equipment was acquired by Avmin in 2000. The board eventually approved the project in 2003 and construction started in 2004.

Avmin was acquired by ARM, which resolved to sell the Pelindaba plant in 2005 after it was identified as a non-core business. Basileus then bought the assets from ARM and commissioned the vacuum melting processes.