Tharisa acquired a 26.8% stake in Karo Mining Holding
, a platinum group metals (PGM) and base metals project in Zimbabwe, which could lead to new future chrome and PGM projects, it said last week.
In May, it announced it had acquired a 90% stake in Salene Chrome Zimbabwe
"These are very exciting opportunities that tick a lot of our investment boxes, including being large scale and low cost. We'd like to see ourselves make a difference in Zimbabwe as well,” Tharisa chief financial officer Michael Jones told Metal Bulletin.
"Zimbabwe is the world's second-largest deposit for chrome and platinum group metals in the world and I think it will become a significant player in the chrome market going forward,” Jones added.
Zimbabwe’s chrome ore trades at a premium to metallurgical grade chrome ore produced in South Africa by Tharisa and its competitors and is closer to Turkish material in price, Jones said.
"Zimbabwean chrome ore is close to 48% chrome and currently trades at a premium of about $70 to South African metallurgical grade concentrate. It is more in line with Turkish material and it adds another high-spec product to our offering,” he told Metal Bulletin.
Metal Bulletin’s UG2 chrome ore index
, tracking South African exports to China, stands at $210 per tonne, cif China.
"We are very comfortable with the [UG2] price at the moment and I expect it to remain in the $195-210 range for the near term. That's my personal view,” Jones told Metal Bulletin.
By comparison, Metal Bulletin’s price quotation for Turkish lumpy chrome ore
was at $270 per tonne, cfr China on Friday June 15.
Chrome market participants in South Africa welcomed the departure of former president Robert Mugabe
late last year, but warned that significant operational challenges remain in the sector, particularly around logistics and infrastructure.
Tharisa will seek to address some of these challenges through a subsidiary that already manages the transportation of its chrome ore through South Africa.
"There will be some challenges including logistics but I'd also like to touch on the positives. There are many major platinum companies which have been operating in Zimbabwe for years and there are a number of unlisted companies producing chrome profitably in Zimbabwe,” Jones said.
"We do have our own in-house logistics expertise that manages the movement of our chrome product through South Africa and this subsidiary has been tasked with finding the optimum solution for moving our Zimbabwean production,” he said.
Tharisa expects to have a pilot processing plant running at Salene Chrome within a year and to start work on open pit construction at Karo by 2020.
"For Salene Chrome we have submitted an environmental impact assessment. We will then undertake a trenching project and within 12 months we aim to have a pilot processing plant running. On Karo Platinum, I would expect to be commencing the first open pit construction by 2020,” Jones said.
The miner has not ruled out eventually producing ferro-chrome in Zimbabwe but has no near-term plans to do so, according to Jones.
This would most likely come as a result of a partnership, he added.
"I think we would look at possible ferro-chrome production in terms of joint ventures, working with existing companies. We are always looking at innovative ways to increase our participation in the value chain. So it's not on the cards at the moment but there's always a possibility,” he said.