About R1.8 billion is being invested into a ferro manganese production along South Africa’s mineral plush Bushveld Complex as investors tap into alluring opportunities for the metal.
This follows the signing of a binding agreement by Khwelamet, a subsidiary of Khwela Capital, which is jointly owned by Menar Capital and Ntiso Investment Holdings, to fully acquire Samancor’s Metalloys manganese alloy smelter in the Gauteng Province.
Vuslat Bayoglu, managing director of Menar told Business Report in an interview this week that the “completion of the transaction is subject to regulatory” approvals.
“We intend to invest around R1.8bn in the project. The decision was driven by a careful assessment of the markets and available opportunities for growth,” said Bayoglu.
He added that acquisition of the Samancor facility gives Menar and its partner significant options in the manganese space to potentially process third-party manganese ore in addition to its own feed.
There anticipated growth in demand for manganese ore and related products such as ferro manganese is driven by traditional steel production and emerging green energy technologies, such as electric vehicle batteries.
This has yielded robust sentiment that “more opportunities are likely to emerge from the manganese” value chain.
South Africa is also well positioned to capitalise on the vibrant manganese sector as it has vast manganese reserves. More than 70% of the world’s identified manganese resources are in South Africa and mainly concentrated in the Northern Cape.
To capitalise on the prospects, Khwelamet will “further develop the manganese alloy smelter complex, which is currently under care and maintenance” after its operations ceased in March 2020.
Bayoglu added that on completion of the acquisition, the company will begin the process of reviving the industrial complex, using new technology to resolve some of the issues that led to its closure. These include high electricity costs and the unavailability of sufficient power.
“We plan to produce high or medium-carbon ferro manganese alloy. Our main target market for the ferro manganese product are steel manufacturers in Europe and the US,” he said.
Before its closure in 2020 due to unavailability of sufficient power and high electricity costs, Metalloys was the biggest ferro manganese smelter in the world, running four electrical furnaces,.
It was also a big employer and consumed about 2 million tons of manganese a year.
“This strategic transaction, which will see the building of a vertically integrated manganese business, aligns with the company's objective to revitalise industrialisation in key sectors and contribute to growing the economy,” Bayoglu said.
“We saw this as an opportunity to get involved in the re-industrialisation of a region with existing good logistics networks and power infrastructure.”
South32 is the other major producer of manganese in South Africa. Last month, South32’s plans to advance its Arizona based Hermosa project towards manganese production received a boost after the company landed a $166 million funding grant from the US government.
BUSINESS REPORT