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  1. 2D AGO

    We're working with government, looking at possible solutions, says Glencore Alloys CEO

    This audio is brought to you by Astec Industries, a Global Leader in manufacturing equipment for infrastructure, including asphalt production, construction, and material processing, driving innovation and sustainability. "We're working with government, looking at possible solutions," Glencore Alloys CEO Japie Fullard tells Mining Weekly amid Glencore reporting this week that not one of its ferrochrome smelters is operative, not even its world-class Lion smelter - although that may be brought back into operation following current maintenance, but probably not this year. Glencore Alloys produces chrome ore and then beneficiates it into ferrochrome product. "But ultimately, we're a chrome unit producer," Fullard pointed out. (Also watch attached Creamer Media video.) "Wherever we are getting the most value is where we'll obviously capitalise. For that reason, currently if we evaluate between chrome ore exports versus ferrochrome exports, the value of the chrome ore is superceding the value of the ferrochrome," he added. This is ironic because, as Fullard pointed out, ferrochrome should be a five-times multiplier of chrome ore value, so to export ferrochrome, in terms of the revenue, should be massive. Moreover, beneficiation a job-creation cornerstone, so closing all the all the smelters, is not good for South Africa. So, what's the solution? "The first real short-term solution for us must be to get cheaper electricity to enable us to continue to beneficiate. We must be put in a position to be competitive with China. "Then there are other mechanisms that we're looking at such as the control of exports by curbing the illegal mining that's now happening. Another is to bring us into special economic zones that give us tax relief. "Thereafter, if we can get to a longer-term solution in terms of mechanisms to beneficiate more ore in South Africa, that'll be first prize," Fullard outlined. But he made it clear that producing ferrochrome in today's world results in the burning of a lot of cash, which is why the Boshoek and Wonderkop ferrochrome smelters have been put on hold. "When it comes to our Lion smelter, we brought the maintenance programme forward, and it's not at all because of the winter tariffs." A negotiated price agreement (NPA), which is a flat rate, has been secured from Eskom, which means there is no need to continue to pursue the former practice of winter shutdown. "But even with the NPA, even a smelter like Lion, which I would still argue is the most efficient unit in the world, is not making profit, and for that reason, we've also stopped production at the Lion complex, bringing forward the maintenance and we will restart it later. "But the way the price of ferrochrome is looking now, we're most probably not going to start it up for the rest of this year. "What we are lobbying for is electricity that is cheap enough for us to be able to be competitive. What we are lobbying for is to be included into special economic zones. "What we are lobbying for is the stopping the illegal mining that's happening in South Africa. I'm not sure if you know this, but illegal mining of chrome ore is to the tune of about 10%. "So, if government has got a method of stopping illegal mining, and you take 10% of the chrome units out of the market, that will benefit the whole industry because we want to beneficiate in South Africa," Fullard pointed out. Mining Weekly: When Engineering News & Mining Weekly last spoke to you, there was hope that the new lower-energy SmeltDirect technology from African Rainbow Minerals would bring local ferroalloy production in general, and ferrochrome in particular, back to competitive life. Is there still hope that it will do so? Fullard: We are investigating that technology in detail. We are working with African Rainbow Minerals on this and their technology is definitely, efficiency wise, a great solution. But even with that solution, it's going to ask for a huge amount of capital to be invested and becau...

    9 min

  2. 2D AGO

    Martin Creamer talks about: Khwelamet, platinum demand and high gold price

    Mining Weekly Editor Martin Creamer discusses Khwelamet’s ferromanganese revival; the demand outlook for South Africa’s platinum uplifted by China and Toyota’s hydrogen project; and geopolitics keeping the gold price at its current high level.

    5 min

  3. 3D AGO

    Khwelamet ferromanganese revival will begin minute Eskom gives feasible power rate

    This audio is brought to you by Astec Industries, a Global Leader in manufacturing equipment for infrastructure, including asphalt production, construction, and material processing, driving innovation and sustainability. The minute that Eskom gives Khwelamet an economically feasible power price, the refurbishing of two of the four furnaces at the dormant former Metalloys plant in Meyerton will begin and take six to nine months to complete. In the meantime, Khwelamet is focusing on a rehabilitation programme, with work being done on the large volume of on-site furnace slag - which can be beneficiated and sold as 73% to 74% alloy - as well as on operational discard that can be used in the cement market. But the ultimate aim is to prepare the whole operation to be restarted as soon as possible. "Eskom's very helpful and is excited as we are because they want to get the smelters back into the business," Menar MD Vuslat Bayoglu told Mining Weekly in a Zoom interview (Also watch attached Creamer Media video.) The previous owner Samancor Manganese is credited with having kept the operations and everything on site in good condition, including the rail siding that is connected to the national rail network. Raw manganese ore will be railed in from the Northern Cape for beneficiation into ferromanganese, which will be railed to either Durban or Richards Bay for export. "Transnet is also very helpful. Immediately they heard about the deal, they came to the party and they said how can we help you because it's a business they ran before and they would like to help us to make it work, so the vibe is there to make sure this business is restarted so that it can be a good example of reindustrialisation in South Africa. "We've got all the ingredients. We just need to make sure we have the right priced power and we've got consistent power," Bayoglu emphasised. Mining Weekly: Given the considerable energy intensity of the ferroalloys sector, how do you foresee Eskom's performance impacting the industry in the future? Bayoglu: Eskom has improved a lot compared with the past. Their loadshedding is less than what we were having in the past, but I'm not sure if they have really reached a stage where we should not be worried about loadshedding again. The reason why most of the smelters in the ferroalloys sector were closed was because Eskom couldn't give them consistent power and Eskom couldn't give them cheap power. If you look at the current price, which is between R1.60 per kilowatt hour (kWh) and R1.80/kWh, I think that price is still a good price if you compare it with other countries, especially in Europe. But it's not competitive enough for smelters to restart or survive in a competitive market, especially coming from China and India. Our competitors are mainly Chinese ferrochrome smelters and Indian ferromanganese and ferrochrome smelters and they're getting power at a very competitive price from either the private sector or government, and we don't have that in South Africa yet. But Eskom is determined to help the ferroalloy industry and to come up with the right price and consistent power. But I still have some question marks regarding the future of Eskom because they need to make it clear as to how they are going to generate power. I think they're trying their best in terms of creating capacity under renewable energy and putting that renewable energy to the grid but they must also be clear on what's going to happen with baseload capacity. I think we're all waiting for the Integrated Resource Plan (IRP) to be published. With that IRP, we'll all see what they're planning. It's either nuclear or the current coal fleet to be refurbished or a new coal fleet to be started, obviously with the help of renewable energy, which will help us to transition from fossil fuels to cleaner sources of energy. But I think there's still a question mark and we'll see with the IRP what's going to happen, but I think Eskom's going in the right direction at the m...

    9 min

  4. 4D AGO

    Glencore indentifies major cost savings opportunities in half-year review

    This audio is brought to you by Astec Industries, a Global Leader in manufacturing equipment for infrastructure, including asphalt production, construction, and material processing, driving innovation and sustainability. During the first half of this year, diversified mining and marketing group Glencore continued to optimise the business and position it for further value accretive growth, CEO Gary Nagle reported on Wednesday. A review during the period has recognised opportunities to streamline the industrial operating structure of the Johannesburg- and London-listed company and support enhancement of technical expertise. One-billion dollars worth of recurring cost-saving opportunities were identified across more than 300 initiatives against a 2024 baseline. These cost savings across operating structures are expected to be delivered by the end of 2026, with more than 50% already targeted for the end of this year. Organisational changes already made include the creation of a single nickel/zinc department from two separate ones before, with the combined department now assuming management of the overall custom metallurgical processing assets portfolio. Optimisation and savings across headcount, energy, consumables, contractors, maintenance, and administrative functions is involved. Morgan Stanley Research analysts stated in a note: "We believe that execution on these savings remains key given the steepness of the implied unit cost decreases, especially in copper." This year is expected to be the floor for copper department production volumes, which are said to be on a pathway back to one-million tons a year by 2028. "We'll curtail production where it makes sense," Nagle outlined during the presentation covered by Mining Weekly. Examples where such curtailment has already taken place are in ferrochrome, copper/zinc smelting and coal. While Glencore's zinc and coal assets are largely operating at the required run rates to deliver full-year volumes, the company's copper business is navigating various temporary, but largely expected, operational factors, including mine sequencing, lower grades, water constraints and cobalt stockpiling, impacting half-year production at Collahuasi, Antamina, Antapaccay and KCC, with all these operations expecting a substantial step-up in the second half of this year. "Weak coal prices and low copper production were headwinds in the first half, but we see value at current levels," Deutsche Bank Group analysts commented. Half-year earnings before interest, taxes, depreciation and amortisation (Ebitda) was a 17%-lower $3.8-billion, reflecting weaker coal prices and lower copper production. Net debt to June 30 was $3.2-billion higher at $14.5-billion. "Second half should be better," Jefferies UK Metals & Minerals headlined in a results summary. With healthy second-half cash flow generation leading to deleveraging, net debt is poised to reduce meaningfully by year-end. The completion of the Viterra sale in early July brought in $900-million cash, along with 16.4% of the New York-listed Bunge shares that will be monetised for Glencore shareholders at some point in future. Supported by the $2.63-billion value of the Bunge shareholding, Glencore announced a share buyback of up to $1-billion to be concluded by the presentation of its annual results in February next year. The second tranche of next month's base $0.05-a-share dividend payout will incorporate the new up to $1-billion share buyback communicated in July, taking total announced 2025 shareholder returns increases to $3.2-billion. The completion of the Viterra sales process, the long-term marketing guidance Ebit range of $2.3-billion to $3.5-billion is also uplifted, the new midpoint of $2.9-billion representing a 16%-higher $2.5-billion. "While there is much uncertainty around the impacts of geopolitics and trade in the shorter-term, we remain of the view that, in certain commodities, the scale and pace of required resource development will strugg...

    4 min

  5. 5D AGO

    Mantashe wants all diamond producers to contribute towards collective diamond marketing efforts

    This audio is brought to you by Astec Industries, a Global Leader in manufacturing equipment for infrastructure, including asphalt production, construction, and material processing, driving innovation and sustainability. After attending a high-level Ministerial roundtable in Luanda, Angola, in June, Mineral and Petroleum Resources Minister Gwede Mantashe has proposed that South African diamond producers contribute 1% of their revenue to a joint initiative aimed at revitalising diamond sales through collective marketing. At the roundtable event, which brought together Ministers from major African diamond-producing countries such as Botswana, Namibia, South Africa, Sierra Leone and the Democratic Republic of Congo, one of the key discussions focused on the global decline in demand and prices for natural diamonds, which is placing the industry under significant pressure. A proposed solution was to invest in reinvigorating the marketing of natural diamonds, with a call for collective financial contributions to support a sustainable global marketing strategy. Mantashe brought this proposal before diamond industry stakeholders at a sector engagement session held in Kempton Park on August 5. "There was a long discussion about it and they wanted us to sign an accord. I said, in terms of South Africa's culture, I can't sign that accord before doing two things. First, I must take it to Cabinet so that government is aware of the Accord. "Second, I said I can't sign the agreement before speaking to the diamond producers. I can't commit them to a 1% contribution towards the marketing of natural diamonds without consulting them," Mantashe said. While some of the larger diamond producers voiced conditional support for the proposal, South African Diamond Producers Association chairperson Gert van Niekerk, who was present at the stakeholder engagement, pushed back against the idea, stating that small-scale diamond producers that were barely surviving would not be able to afford a 0.1% contribution without going under, let alone a 1% contribution. "I represent the smaller side of the producing industry - the non-listed companies - and the fact of the matter is, there is no way we can afford, at this stage, 1% of turnover. In principle, we do agree about the marketing effort. Where we disagree is the way we are going to finance that," he said. Former Orion Minerals CEO and Minerals Council of South Africa Junior Exploration and Mining Leadership Forum chairperson Errol Smart offered an alternative view, suggesting that, since all diamond producers in the country already pay between 3% and 7% of their revenue to the State as a royalty, a portion of those funds should be redirected towards the collective diamond marketing effort. "Surely that is a proper diversion of funds to keep this industry alive. Otherwise, it will fall over, and the whole 3% to 7% will be lost. We're dealing with an industry that's running on broke. "De Beers, as one of the long-life companies, has been able to build up treasuries to survive this. The junior sector, the small-scale miners, are running in the red at the moment. A 1% reduction in revenue at the moment will kill them," he said at the event. However, the rebuttals from these and other key industry stakeholders appeared to fall on deaf ears. "I think there is support for the proposal for the 1%. The original proposal was that it should be extended to all players in the value chain, but the proposal also acknowledged that not everyone is operating at the same level. "I think we should consider the option of implementing it at different levels," Mineral and Petroleum Resources deputy director general Tseliso Maqubela said. Mantashe, meanwhile, obfuscated the argument by quibbling over semantics. "You say the non-listed companies can't afford 1%. I'm not sure if listing or non-listing really makes a distinction. I know of many big companies that are not listed. So, it's not the listing that makes it impossible to...

    5 min

  6. 5D AGO

    Demand outlook for South Africa's platinum uplifted by China-Toyota hydrogen project

    This audio is brought to you by Astec Industries, a Global Leader in manufacturing equipment for infrastructure, including asphalt production, construction, and material processing, driving innovation and sustainability. A development that is improving the demand outlook for South African platinum group metals (PGMs) is the announcement of a joint venture (JV) between Japan's Toyota Motor Corporation and China's Shudao Investment conglomerate to build a hydrogen fuel cell plant in Chengdu, Chengdu, in China's Sichuan province, is the chosen location of the emerging one-billion yuan facility that will focus on producing fuel cell systems and components for heavy-duty commercial vehicles, amid the bolstering of China's hydrogen ecosystem and support for national carbon neutrality. Scheduled to be operational by year-end, the project will produce hydrogen fuel cell systems, fuel cell stacks, and components to support a wide range of commercial vehicles, including large trucks, dump trucks, buses, and municipal sanitation vehicles. The green electricity and hydrogen required will be supplied from the emerging Chengdu-Chongqing Hydrogen Corridor, which is on its way to becoming a regional hydrogen hub for commercial vehicle applications. Local government support and incentives - such as highway toll reductions for platinum-based fuel cell electric vehicles (FCEVs) - helped to seal the deal that is destined to create one of the world's distinctive hydrogen regions. Research and development (R&D), production, sales, and service operations will be incorporated under one roof, aligning with Toyota's larger strategic objective of contributing to China's 'double carbon' goal of reducing carbon dioxide and achieving net-zero emission, the publication Fuel Cell Works reports. World Hydrogen states in a media release to Mining Weekly that the total number of FCEVs in China has overtaken the corresponding figure for neighbouring South Korea. After this recent turn of events China's claim to being Asia's top hydrogen technology region is now stronger than ever, World Hydrogen adds. With its launch the Mirai car, Toyota pioneered hydrogen mobility and the JV with Shudao Investment Group adds to a growing portfolio that includes previous collaborations with organisations such as the United Fuel Cell System R&D (Beijing) and Huafeng Fuel Cell. With this latest commitment, Toyota cements its ambition to be a central player in the evolution of China's hydrogen supply chain. World Platinum Investment Council (WPIC), encouraged by China's ongoing commitment to hydrogen, said this in response to a request for comment by Mining Weekly: "The announcement that Toyota is committing to a major investment in fuel cell production within China underscores the importance of the Chinese market to the hydrogen outlook. "WPIC forecasts China to be the major driver of the hydrogen economy, making up more than 50% of installed electrolyser capacity globally by 2030, and 32% of hydrogen linked demand for platinum. "Whilst the development of the hydrogen economy in some regions has been slowed by recent economic uncertainties, it is encouraging to see China's ongoing commitment to hydrogen," WPIC research director Ed Sterck stated. WPIC expects hydrogen FCEVs to make up 8% to 12% of the future vehicle market in China. Fuel cell stack costs have already declined by 80% compared with 2018. Current focus is on longevity and achieving 1.8-million kilometres of fuel cell life. Meanwhile, the Guangzhou Futures Exchange (GFEX) has confirmed that physically-settled platinum and palladium futures are heading for launching after two years of development. The contracts have been benchmarked against international exchanges. It is understood that GFEX plans to launch options in addition to the previously-announced futures contracts. GLOBAL GREEN HYDROGEN ACTIVITY In Brazil, China's Envision has joined Fotowatio Renewable Ventures to develop a 500 MW green hydrogen and green a...

    8 min

  7. 6D AGO

    AngloGold holds costs below 2% amid peers averaging 15%-plus

    This audio is brought to you by Astec Industries, a Global Leader in manufacturing equipment for infrastructure, including asphalt production, construction, and material processing, driving innovation and sustainability. Johannesburg Stock Exchange secondary-listed gold mining company AngloGold Ashanti has managed to repress costs to below 2% amid peer gold mining companies averaging above 15%. "We maintain cost discipline despite persistent inflation," AngloGold CEO Alberto Calderon outlined during the company's presentation of half-year results, of doubled second-quarter earnings and free cash flow. Since 2021, cash cost and all-in sustaining cost control has put the New York-listed company has given itself a 13%-plus cost control lead start of over its gold counterparts. "That gap matters, especially in a strong gold price environment," Colombian Calderon, a former International Monetary Fund luminary, emphasised during the presentation covered by Mining Weekly. (Also watch attached Creamer Media video.) Financially, AngloGold is in an exceptionally strong position, having slashed debt, amplified liquidity and long-dated maturities. Second-quarter free cash flow of $535-million was 149% up on the corresponding period of last year. Gold production from managed operations was 25% up, supported by strong contributions from Africa's Obuasi in Ghana and Geita in Tanzania as well as the addition of the Sukari gold mine in Egypt. Since Calderon assumed the CEO role four years ago and including the first quarter of this year, the South Africa-created AngloGold has paid out $1.2-billion in dividends while simultaneously capitalising growth projects. "Our new dividend policy will ensure shareholders see the fruits of the improved operating cadence, a higher gold price and much higher cash flow we're seeing now," Calderon added. An interim dividend of 80 US cents per share was declared, which includes the minimum quarterly dividend of $63-million or 12.5 US cents, with the balance reflecting the decision to pay half of the soaring free cash flow generated for the six months through to June 30 June. "We've gone about systematically addressing the issues over the past three years and today the fundamentals of the business are strong and the outlook even better. We're taking meaningful strides to achieve and reach our full potential," he said, describing the company's valuation as being far from demanding. PIPELINE OF ORGANIC GROWTH OPTIONS Earnings before tax interest depreciation and amortisation increased 111% to $1.44-billion, headline earnings rose to $639-million, and net cash flow from operations rose to $1.02-billion. "During the extraordinary turnaround journey we've been on since 2021 we've continuously assessed where we can generate most the value. The answer is clear; the best opportunities remain within. "Firstly, we're committed to lifting performance from our core assets, driving margin growth through cost discipline, full asset potential has been invaluable in this regard." "Keeping cost flat in real terms has improved our position and helps us to reliably deliver our guidance. This is now embedded in how we work, and we see more opportunity to drive value. "The insights have helped us to unearth a pipeline of organic growth options that are beginning to reveal themselves. This pipeline extends well beyond Obuasi, which itself is starting to develop a consistent operating cadence as it ramps up. There are other equally exciting projects to build scale and extend life at Cuiabá, Siguiri, Geita, and Iduapriem. AngloGold CFO Gillian Doran reported that liquidity remains substantial at $3.4-billion, including $2-billion in cash and cash equivalents, allowing AngloGold to fund its growth pipeline, return capital to shareholders and navigate commodity price cycles with confidence. "We maintain cost discipline despite persistent inflation," Doran highlighted amid the gold price averaging a 41%-higher $3 287 an ounce in the th...

    5 min

  8. AUG 1

    Soaring free cash flow uplifts AngloGold dividend payout as debt plummets 92%

    This audio is brought to you by Astec Industries, a Global Leader in manufacturing equipment for infrastructure, including asphalt production, construction, and material processing, driving innovation and sustainability. The second-quarter earnings and free cash flow of AngloGold Ashanti more than doubled year-on-year, driven by the high gold price and what the New York- and Johannesburg-listed company highlights as continued cost discipline and a 21% increase in gold production. The second-quarter free cash flow of $535-million was 149% up on the corresponding period of last year with the 25% gold production from managed operations supported by strong contributions from Obuasi in Ghana and Geita in Tanzania as well as the addition of the Sukari gold mine in Egypt. The average second-quarter gold price received per ounce increased to $3 287/oz from $2 330/oz in the corresponding period of 2024. "This is another strong result that again demonstrates our focus on cost control and the positive momentum we're building across the business," AngloGold CEO Alberto Calderon stated in a release to Mining Weekly. "We're reaping the benefit of consistent production and cash flow growth, supported by disciplined capital allocation," Calderon added. An interim dividend of $0.80 per share was declared, which includes the minimum quarterly dividend of $63-million or $0.125, with the balance reflecting the decision to pay half of free cash flow generated for the six months through to June 30. While dividend policy commits to this 'true up' payment of 50% of free cash flow annually at year-end, the board used its discretion to make the payment at the half-year given the strength of cash flows and its confidence in the outlook. Adjusted net debt is down 92% year-on-year to $92-million, and the ratio of adjusted net debt to earnings before interest, taxes, depreciation and amortization (Ebitda) improved to 0.02x, from 0.62x a year earlier. The group ended the second quarter to June 30 with liquidity of $3.4-billion, including $2-billion in cash and cash equivalents. Adjusted Ebitda increased 111% to $1.44-billion, headline earnings rose to $639-million, and net cash flow from operations rose to $1.02-billion, boosting free cash flow for the quarter. Second-quarter gold production rose 21% to 804 000 oz from Sukari and improved performances were reported at Obuasi (+31%), Geita (+20%), Cerro Vanguardia (+7%), Cuiabá (+6%) and Siguiri (+6%). Production improvements were led by Geita, which consistently delivers strong operating results, and Obuasi, where the ramp-up of underhand drift-and-fill mining progressed on schedule, supporting the 21% year-on-year increase in grade. Siguiri, Cerro Vanguardia, and Cuiabá also posted modest gains. These were partly offset by declines at Iduapriem, Serra Grande and Tropicana, while Sunrise Dam held broadly steady. Group cash costs increased by 8% to $1 226/oz, while all-in sustaining costs rose 7% to $1 666/oz, driven primarily by a 28% increase in sustaining capital expenditure, inflationary cost pressures of 5%, and a $60/oz average increase in the overall royalty charge linked to the higher gold price - factors partly offset by higher gold sales volumes. Second-quarter capital expenditure (capex) rose to a 33%-higher $381-million, with sustaining capex increasing 28% to $273-million year-on-year. The increase in sustaining capex reflects the inclusion of Sukari and ongoing investment to support asset integrity and long-term operational resilience, in line with strategic priorities. A strong safety performance was maintained in the second quarter, with a total recordable injury frequency rate of 0.80 injuries per million hours worked, an improvement of 17% year-on-year and below industry benchmarks.

    4 min
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MiningWeekly.com provides real time news reportage through originated written & video material. Now you can listen to the top three articles on Mining Weekly at the end of each day.

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