Tharisa shipped 995,80 mt of chrome concentrates in fiscal 2017, ended Sept. 30, 2017, vs. 923,100 mt in fiscal 2016, up 7.9%. The company’s average metallurgical chrome concentrate price in fiscal 2017 was $200 per mt vs. $120 in fiscal 2016, up 66.7%.
The company noted that chrome ore prices in fiscal 2017 ranged from $390 to $130, and that the higher prices had a negative effect on South African ore shipments to China.
Tharisa’s chrome feed grade was 17.8% and with chrome recoveries improving to 64.1% (target 65%), chrome concentrate production increased by 7% to 1-million mt. Production of specialty grade chrome concentrates of 323,100 mt increased 19.9% and constitutes approximately 24.3% of total chrome concentrate production.
Specialty grade chrome concentrates commanded an average of a $50 per mt premium on a c.i.f. China equivalent basis over standard metallurgical grade chrome concentrates.
The chrome segment gross margin of 34.1% (2016: 21.9%) was higher than the year before largely due to the increased chrome concentrate price notwithstanding the increased cost of sales based on the increased allocation of the shared production costs.
Freight costs for bulk shipments of chrome concentrates increased by 40% from $10 per mt to $14, coupled with a 9.5% strengthening of the ZAR against the $, resulted in the average transport cost per chrome mt increasing from $42 to $52.
The production outlook for fiscal 2018 is 1.4-million mt of chrome concentrates, of which 350,000 will be specialty grade chrome concentrates. Tharisa’s vision for 2020 is to produce 2-million mt of chrome.
Arxo Metals Proprietary entered into an operating, sales and marketing agreement with Western Platinum to operate their K3 UG2 chrome concentrator plant. The handover date was Aug. 28, 2017 and during the short time under Tharisa’s control 20,000 mt of chrome concentrate was produced.