Glencore Chromite to Ferrochrome Leadership benefiting KWG - https://investorintel.com/market-analysis-intel/ferrochrome-primer Posted September 15, 2016 by Lara Smith.
-
- KWG getting help from their friend Glencore, whose Chromite, etc Expertise is second to none, makes sense, whereby the KWG NS RR into the ROF & maybe beyond, is the Canadian National RR & KWG's Patented Custom Treatment Natural Gas Reduction Furnaces, etc Producing Ferrochrome, etc; well South of the ROF for KWG International Marketing, with or without any Glencore Financing; also makes sense for Canada & Northern Ontario up to Hudson Bay remaining 100% Canadian. Again, no ROF Chromite should ever be exported without a Cnd Federal Govt Export Permit & then only a 1-off very small amount.
- Glencore-Merafe guided higher 2016 ferrochrome and nickel production for 2016. In 1H16, Glencore’s attributable share of ferrochrome production was 762,000 tonnes and the company has guided 1.575m tonnes for 2016, up from 1.462m tonnes in 2015.
- While there has been no indication from either Hernic or Glencore for a possible merger or buyout, the Hernic plant may be a good strategic fit for Glencore. We expect that these increases in corporate activity may increase the likelihood of Glencore bidding for the 420,000 tpa Hernic operations.
- Glencore dominates the UG2 chrome ore market on the Western Limb and Hernic is located close to Rustenburg. If there was a merger, then Glencore’s overall chrome capacity would rise to 2.7m tpa.
In effect once the dust settles, South Africa’s ferrochrome market is expected to be dominated by two major players, namely, Samancor and Glencore. While Afarak and Traxys will remain much smaller entities, producing charge chrome and we expect that Afarak may even be bought out or merge in the relatively short term.