[Ferro-Alloys.com]Chome ore and ferrochrome global output decreased marginally in 2015, which is a clear indication that the industry is going through a tough phase, with some major players facing financial difficulty. This is according to International Chromium Development Association (ICDA)market research analyst Loïc Racon, who was addressing about 135 global delegates – along with several other presenters – at the ICDA’s 2016 members meeting which took place in Tirana, Albania, last month.

However, he noted that chrome ore and ferrochrome imports in China had increased in the past year. Natural resources consultancy Bryanston Resources project leader Roderick van Losenoord highlighted in his presentation that the US dollar “is [ continuing] and will” continue to be the driving currency for ferrochrome, as various restrictions prevent China’s yuan from taking over.

He said that the strong US dollar benefited ferrochrome producers’ margins; however, he pointed out that the ferrochrome price drop had erased most related gains.

“Consequently, ferrochrome production has been under significant pricing pressure. Currency volatility is likely to persist amid uncertainty after years of low interest rate policies by various central banks,” stated Van Losenoord.

Ferroalloys consultancy Alloy Consult managing consultant Kevin Fowkes emphasised in his address to the conference that electricity was a major component of ferrochrome production costs and its consumption was driven principally by furnace technology and the processes employed.

“Over the past few years, power prices have been declining in most major ferroalloy- producing countries; however, most of the major ferrochrome-producing nations have seen substantial currency devaluations since the 2008 financial crisis,” he commented. Fowkes explained that this mattered as between 50% and 80% of ferrochrome cash costs were typically denominated in local currency, making exchange rates important drivers of the market. He said that, over the past few years, though power prices had decreased [in Europe and Asia], electricity prices had continued to increase as a percentage of total cash costs for ferrochrome operations.

Nonetheless, Fowkes emphasised that lower power costs did not always correlate with a low-cost operation. Geological Survey of France geological engineer Laurent Bailly noted in his presentation that about 75% of chrome ore comprised stratiform deposits, which were largely located in South Africa, Finland and Zimbabwe, among others, and 25% podiform deposits, which were prevalent in Kazakhstan, Turkey and the Philippines, among others. “The resources and reserves of many chrome ore deposits are not reported according to international standards, making it difficult to properly estimate chromite resources exhaustion.

“However several chromite prospects have been identified and may represent additional reserves in the future. The bottom line is that there is no geological constraint on chromite for the medium term, as reserves are sufficient for the short term and for the twenty-first century, even with reasonable demand growth,” he highlighted. Meanwhile, ICDA deputy secretary-general Sheraz Neffati told Mining Weekly that the association had successfully arranged a technical tour for a group of 35 delegates to visit chrome ore and ferrochrome producer Albchrome’s Bulqizachromium mine, in Dibër county. The tour included a visit to the company’s Elbasan ferrochrome plant, in Elbasan county. In addition, she said that Albchrome gave “an extremely comprehensive” presentation on the Albanian chrome industry, which ensured that delegates were provided with a thorough understanding of the industry in Albania.

Albchrome CEO Luan Saliaj pointed out that production of chrome in Albania started in the 1940s and the country’s total chrome ore production since 1947 had topped 29.6-million tons. He noted that there were six chrome deposits in Albania; however, Saliaj emphasised that the most important one was the Bulquiza deposit. According to the company’s website, Bulquiza’s chromite is globally recognised as the finest quality in the world, owing to its high chrome to iron ratio that commonly exceeds 2.5:1, with best grades in excess of 3.3:1. Saliaj further pointed out that, from 1979 to 2015, Albania had produced about 992 000 t of high-carbon ferrochrome.

In conclusion, Neffati noted that the ICDA was currently finalising the programme for its upcoming conference in Shanghai, China, which would run from November 8 to 10, where “delegates could again enjoy a quality programme.” Full details of the conference and programme are scheduled to be released on the ICDA’s website soon. 

 

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