Merafe Resources to build PGM production plant in joint venture with Glencore

MERAFE Resources said it would produce platinum group metals (PGMs) from its Kroondal Mine held in joint venture with Glencore.

The Johannesburg-listed group owns 20.5% of the Merafe Glencore Joint Venture which is expected to produce about 1.9 million tons of ferrochrome in 2021.

Merafe said today in a fourth quarter production report that it would contribute towards a new plant at the joint venture’s Kroondal Mine.

The PGM production plant would be supplied with chrome ore from the joint venture’s¬†Western Chrome Mines.¬†Material will also be supplied from tailings and ore from other mines operating in the region to which the joint venture has interests.

Glencore states on its website that the joint venture with Merafe has “interests” in a number of mines and smelters in the region including the Helena, Magareng and Thorncliffe chrome mines on the eastern limb of the Bushveld Complex.

Glencore has said in the past it has no interest in the PGM business as it’s not a sector it understands especially well. In 2015, Glencore sold its 23.9% stake in Lonmin which it had previously bought via its takeover of Xstrata.

However, processing chrome ore for PGMs has become a lucrative business owing to the improvement in the basket price of PGMs over the last two years. A number of businesses had adopted the retreatment of mined chrome ore for PGMs including Tharisa and Jubilee Metals, both listed on the Johannesburg Stock Exchange.

In its production report, Merafe said fourth quarter attributable ferrochrome production from the Glencore Merafe Chrome Joint Venture increased 5.1% to 101,000 tons taking full year attributable production to 379,000 tons, a 42.7% increase year on year.

“The increase was mainly due to current production being less affected by the Covid-19 restrictions coupled with improved plant efficiencies achieved at our smelters,” said Merafe.