Mineral Zone, a specialist supply partner servicing the metallurgical and mining sectors in South Africa and internationally with a range of metals and minerals, ore and services, has entered into an agreement with Amava Mining Investment. The agreement means that Amava has acquired a 26% shareholding in Mineral Zone as of July 2018.
“This strategic partnership is beneficial to Amava and ourselves, for many reasons,” explains Mineral Zone’s Managing Director Brendan Homann.
“Amava have been looking to grow the mining operations side of their business and needed a partner with a network of strong links in the domestic and international trade of consumables and specialised products. Conversely Mineral Zone was looking for a dedicated South African supplier of complementary and new products that the company currently markets, while at the same time the products would open up new doors into other industries, markets and countries,” continued Homann.
“The volume of specialised industrial minerals, alloys, foundry and steel plant consumables and ores that we supply has grown significantly during the company’s short history, now four years. Through our established relationships, we have developed partnerships with principles around the globe trusting us with their brands to penetrate the South African market, servicing the metallurgical and mining sectors. This has resulted in us being appointed as a preferred foundry distributor for the SI Group HA South Africa’s foundry products, Capital Refractories Limited’s refractory products for metal melters and foundries, LKAB Minerals’ iron ore and the refractory mineral products and the refractory products produced by Norwegian company Elkem.”
“But it is not just the local market that we service. During the company’s existence I have networked worldwide and we have been trading on the world’s stage, servicing the metallurgical and mining sectors with a range of metals and minerals, ore and services. These countries include Thailand, Japan, South Korea, Finland, Germany, Spain, Portugal, UK, Russia and others in South America and the Middle East.”
“This track record appealed to Amava and when they presented their products and future plans about further beneficiation of local metals and minerals, we were certainly interested.”
Puven Ramasamy, CEO and founder of Amava Mining Investment, takes up the story: “Since our inception as an IT company in 1998, Amava has diversified into various industries by offering our services as investors, innovators and thought leaders.”
“In search of new horizons and eager to expand our investment portfolio, in 2008 Amava ventured into the unfamiliar territory of chrome processing. We designed and commissioned a chrome beneficiation plant from the ground up. However, being the innovators that we are, it did not suffice to simply be in the chrome mining trade and it was not long before Amava were on the lookout for a niche in the market and ways to improve and refine our mining operation. It was during this search that we recognised the need for waste removal from mines in the area. It stirred in us a desire to make our mining operation ‘green’. Using our own intellectual property we developed a process by which chrome mining waste is further refined into a product that can then be re-sold and re-used. Amava have since perfected this process to such a degree that the very companies who we acquired the waste from are now buying it back.”
“Pleased with our achievements in chrome waste recovery and with a fervent desire to spread this eco friendly model to other sectors within the mining industry, in 2012 Amava further expanded our operation to the coal mines. Amava found a way to take coal discard and amalgamate it to form a product that can then be used as a natural growth and yield enhancer for the agricultural industry.”
“Today we regard ourselves as a thought leader in innovating the removal and transformation of mining waste into functional products that have a low environmental impact.”
“Still not satisfied, further investigations revealed that the demand and supply of bulk ferroalloys, ores and concentrates was a projected growth industry for the 21st century. We knew that the need for iron alloys containing chromium, manganese, molybdenum, silicon, titanium, tungsten, vanadium and other elements in varying proportions is highly cyclical in the short term despite rising in the long term. Cars, aircraft, trains and buildings all require massive amounts of industrial metal. As economic growth resumes, so will the demand for industrial and precious metals, and the mining industry will benefit from heightened demand from India, China and Latin America.”
“We have recognised these signals and are investing in a plant that will be commissioned in 2018. The plant will produce the principal ferroalloys, which are ferromanganese, ferrochromium, ferromolybdenum, ferrotitanium, ferrovanadium, ferrosilicon, ferro boron, and ferrophosphorus. These are brittle and unsuitable for direct use in fabricating products, but they are useful sources of elements for the alloying of all types of steels. Ferroalloys are added to steel during the manufacturing process to achieve the desired degree of corrosion resistance, heat resistance, tensile strength, yield strength and other qualities.”
“The partnership with Mineral Zone is a perfect fit for both companies. We have a reliable service orientated supplier to the mining and minerals market and conversely they have a dependable manufacturer that can satisfy their demand.”
“Additionally, we now have an outlet for our good quality chrome sand, which we can produce through our manufacturing operations. South African refractory chromite in granular form (chromite sand) is widely used in the foundry industry for both ferrous and non-ferrous castings, particularly in the automotive, shipbuilding and heavy-engineering sectors. The merits of chromite foundry sands include high refractoriness, good chemical stability, low thermal expansion – which means the mould retains a stable size – and high density and thermal conductivity (which promote rapid solidification of the casting).”
“But there are always problems with quality and supply as it is a by-product of ferrochrome production and not high on the agenda of these mining operations. We are now the reliable supplier that local and international foundries have been looking for.”
“The commitment by both parties emanating from the shareholding agreement will dissolve any manufacturer/supplier and distributor disputes – it is not in our interests. This is an integrated manufacture and supply agreement, which is not a common phenomenon in the industry,” added Homann.
“Our mandate is to market the entire production capacity of ferroalloys and chromite sand. We are targeting to supply 1 000 tons of each mainstream ferroalloy per month; these being the range of ferro chromes and ferro manganese, and 2 000 tons of chromite sand a month. Local foundries will have the luxury of ordering any desired quantity on a just-in-time basis, thus alleviating any cash flow problems with money tied up in consumables. Our global clients will have the same luxury as we increase our range of parcels on offer to them. The four factories that we now occupy can accommodate our needs at the moment but with the anticipated growth we have already started looking for additional factory space.”
“This partnership is going to allow us to achieve BBBEE status requirements and open up new markets for us. We will now be targeting to supply the fertilizer and animal feed industries with various mineral ingredients sourced through our global partners. Currently we have a comforting equal split in supply to the foundry, refractory and minerals segments. Our export desk has grown exponentially making up for at least 40% of our revenue. We are also looking to increase our product range and will advise the market once we have concluded our negotiations.
For further details contact Brendan Homann of Mineral Zone on TEL: 010 599 2442 or visit www.mineralzonesa.com