Samancor Chrome looking at shedding nearly 2 500 jobs

Weak prices and Eskom’s power supply problems among reasons given.

South African miner Samancor Chrome said it could cut close to 2 500 jobs in response to weak chrome prices and power supply problems, according to a letter sent to unions and seen by Reuters.

The warning follows a separate notification about 599 potential job cuts at its smelting operations and corporate offices, and highlights how the struggles of state power utility Eskom are dragging on the economy.

It told unions it would hold talks over 2 438 potential job cuts at its Eastern Chrome and Western Chrome mines. It needed to cut costs and was facing increased power tariffs and problems with electricity supply, the letter stated.

This comes after Glencore and Merafe said they could cut jobs as well. Joint venture partners Glencore and Merafe Resources could cut up to 665 jobs at their Rustenburg ferrochrome smelter in South Africa because of problems including power cuts and rising electricity tariffs.

A large percentage of the world’s economically mineable chrome ore reserves are located in the Bushveld Igneous Complex (BIC), a saucer-shaped deposit in the northern and north-eastern provinces of South Africa. Chrome ore is mined along the eastern and western rims of the complex.

Samancor Chrome, a private company, produces more than one million tons of ferrochrome per year according to its website.

Western Chrome Mines
In the Western belt, Samancor Chrome’s mines include Millsell and Mooinooi stretching over a distance of 50 kilometres between Rustenburg and Brits in the North West Province.

Western Chrome Mines has a capacity of two million tons of run of mine ore. The main products of the mines are metallurgical and chemical concentrates, with some foundry grades.

Eastern Chrome Mines
The Samancor Chrome mines in the eastern belt include Doornbosch, Lannex, Tweefontein and Steelpoort (Winterveld) and stretch over a distance of 100 kilometres in the Steelpoort region, some 200 kilometres from Lydenburg in Mpumalanga. Total capacity at Eastern Chrome Mines is over two million tons of run of mine ore per annum. Actual production varies according to market demands.

Foundry grade products are used as moulding sand in the casting industry. Chrome is useful here as it has a low coefficient of thermal expansion, and has good heat transfer properties. These grades have a low silica content and are screened to give a specific size distribution. Acid demand values as well as pH (potential of hydrogen value indicating acidity or alkalinity) of these products are also important to the user.

A range of refractory grades are produced, for use in the production of magnesia-chrome bricks and other refractory products. Silica content is low, and a variety of specially-sized products are available.

Chrome alloys
Ferrochrome is an essential ingredient for the production of stainless steel, and is an alloy of iron and chromium with a chromium content of between 50 and 55 per cent. Stainless steel depends on chrome for its appearance and its resistance to corrosion.

Ferrometals, another Samancore Chrome company, is the largest single ferrochrome producer in the western world and is situated just outside of eMalahleni (formerly known as Witbank) in Mpumalanga. The IC3 plant produced intermediate carbon ferrochrome for the foundry and special steel-producing markets between 1986 and 2015. The bulk of its production currently comprises of charge chrome, and its operations also include Ferroveld, a joint venture with Elkem.