MENAR intends to invest $100m in a refit of Metalloys, the Gauteng-based manganese smelting facilities the privately-owned company bought from South32 last week.
News24 cited Vuslat Bayoğlu, MD of Menar as saying the company intended to replace Metalloys existing technology with energy-efficient blast furnace technology. “So, we think that if you change the technology, then we can make it work,” he told the publication. “The idea is… to reinvest and reindustrialise and to create jobs,” said Bayoğlu.
South32 mothballed the facilities in March 2020 booking a $109m impairment on the asset, mostly owing to the increased in electricity cost supplied by Eskom.
Menar will assess re-developing existing infrastructure at the Metalloys site which includes a 50MW gas-fired power station fed by a pipeline. Bayoğlu said blast furnace technology “… doesn’t require a lot of power”.
“And that 50MW gas-fired power station will be more than enough to top up whatever power we need for the site,” he told News24.
Menar bought Metalloys through its subsidiary Khwela Capital, which is jointly owned by Menar Capital and Ntiso Investment Holdings. Ntiso is headed by former deputy finance minister Mcebisi Jonas, said News24.
Predominantly a thermal coal exporter, Menar stepped into the manganese market with the development of its East Manganese mine in 2021.
Bayoğlu described East Manganese as ‘school fees’ as his company hadn’t made money. The mine is due to close in about six months, but Menar is considering developing a new 50 million ton manganese desposit, he said.
Manganese is used mainly in the manufacture of carbon steel. Prices in the mineral can be volatile, and have been underwhelming over recent years.
But the outlook has improved following weather damage sustained South32’s GEMCO facilities this year which supplies about 13% of world demand.
Global inventories of manganese are expected to last until the third quarter, thereafter a massive supply squeeze is expected, according to a recent report by RMB Morgan Stanley.
