Chromite supply problems mount

NEWS AT THE CORE
Chromite supply
problems mount
Consumers on alert after a major Asian source of refractory grade chromite
closes in the Philippines
by Simon Moores, Assistant Editor
CHROMITE SUPPLY IN Asia has
just got even tighter following
the closure of Philippines based
Benguet Corp.’s Masinloc
chromite mine. Benguet
Corp. is the only producer of
refractory grade chromite in the
Philippines.
The mine closed virtually over
night and there has been a lot
of confusion over the reasons
to the closure, however the
relevant management were
unavailable for comment at the
time of press.
Bernard Kruger, owner of
Cofermin Rohstoffe GmbH,
a leading European trader in
Chromite, told IM: “It is always
strange when a mine closes like
this, especially when everybody
is crying out for chromite.
They must have good reasons
particularly as demand and
development is increasing.
“The last I heard was the mine
was full of water and investment
was needed to pump it out…
as far as I know we took the
last tonnages out a few months
ago. We have a contract with
Benguet Corp., but they just
have stopped delivering – that
is one way of cancelling a
contract.”
Michael Lillja director, head
of sales at SamChrome Ltd,
exclusive agent to Samancor
Chrome, told IM: “The closure
of Benguet’s chromite mine
has made the market even
6
tighter which we have seen
since summer 2007. There has
been a really big shortage of
refractory grade chromite in the
world market. Many consumers
are desperately looking for
refractory chromite but cannot
find any.”
Consumers remain hopeful
as this is not the first time
production has ceased at
Masinloc. In 1998 mining
operations were suspended
owing to poor global market
conditions. The difference now
is that the chromite market
is going through a phase of
strong demand – the closure is
puzzling.
Masinloc’s 100,000 tpa
capacity is exclusively for the
refractory market and supplies
the Asian market.
The announcement has
caused Benguet Corp.’s shares
to suddenly drop in a matter
of days from $0.55/share to
$0.33/share.
The market
The closure will put a dent into
the flourishing Asia market
which has been a new focus for
chromite businesses. Lillja said:
“Some producers are backing
out from the historically stable
markets, and are focusing more
on the Asian market. The fact
is if you do not understand
China you do not understand
the Chrome business.”
Samancor Chrome may have to face an export tax from the South
African government, however the Philippines has it worse as its
only refractory grade supply from Benguet Corp. has just stopped
producing. Courtesy Samancor Chrome
Evelyne Castanié of The
International Chromium
Development Association told
IM: “Both short and long it will
affect China. Current sea freight
prices do not allow chromite to
be exported to other parts of the
world from the Philippines.”
The refractory sector for
chromite is a niche market.
The main supplier is South
Africa, with smaller tonnages
produced from countries
including Philippines, India,
Brazil, Turkey. Global demand
remains solid at the moment
buoyed by the production of
magnesia-chrome bricks, its
chief application.
Kruger of Cofermin said:
“Demand for refractory
grade chromite is high, as
is metallurgical grade which
will always be produced as
a byproduct. The areas of
demand are Russia, the USA,
China and Europe. China
in particular takes a lot of
metallurgical grade.”
Lillja said on the global
market for chromite: “It is very
tight as all markets except the
North American market is
demanding more material that
the producers simply cannot
cope with.”
Prices for non-metallurgical
grades of chrome, particularly
refractory grades, are being
forced up owing in part to
China’s stainless steel industry,
and it looks unlikely demand
will ease soon.
An industry commentator
said: “The market outlook
remains volatile. Non-met
prices are driven upwards by
China and also driven by the
higher ferrochrome prices. If
demand from China calms
down, we will see a correction
to more realistic levels.”
November 2007
NEWS AT THE CORE
LUZON
Tuguegarao
Manila
V IS AYA S
MINDANAO
Baguio
Tarlac
mb
Iba
Coto
Za
Masinloc
chromite
mine
Dagupan
ale
San
Fernando
s
Olongapo
Manila
The Masinloc chromite mine is located in the most northern island
of the Philippines, Luzon. The 100,000 tpa refractory grade chromite
source has caused puzzlement over its closure.
Asia’s refractory source
The Masinloc chromite mine
(also known as the Coto
chromite deposit) is located
in the sitio of Coto, 27km
east of Masinloc port in the
Zambales province. Masinloc
town is approximately 239km
from Manila.
It has been operated by
Benguet Corp. since 1934,
shipping an estimated 15m.
tonnes of concentrate and
was once the world’s largest
supplier of refractory grade
chromite.
In 2002 Benguet Corp.
calculated the extractable
reserves at 2.45m. tonnes
averaging 34.57% Cr2O3 and
4.59% SiO2.
The sourcing outlook is
not all bleak however with
potential new sources of
chromite available.
Lanxess group announced
an increase in ore reserves
of 80m. tonnes after further
exploration in its Rustenburg
chromite mine in South
Africa’s North West province.
London based Chromex
Mining Plc is in the process of
beginning development of the
Mecklenburg Project to mine
chromite ore. This however
is not guaranteed as another
application for the property
has been submitted.
Chromex said: “Another
application has been
submitted for a mining
right at Mecklenburg.
Chromex is pursuing judicial
administrative proceedings to
have the other application set
aside.”
Oregon Resources Corp.,
subsidiary of Industrial
Minerals Corp., is pursuing
the development of a heavy
minerals project in Oregon,
incorporating production of
surface mined chromite ore
(see IM June 2007, p.6 &7).
Tax export talk
The chromite industry has had
its fair share of challenges
recently including a proposal
by the South African
government to tax exports of
chromium ore.
It was originally though that
the South African government
planned to impose a quota
or ban on chromium ore
exports, but now appears to
be favouring a tax of $50/
tonne, which translates to a
tax of $120-$130/tonne of
ferrochromium. Exports of
ferrochromium and chromium
chemicals would be exempt
from the tax.
The International Chromium
Development Association
said: “South African producers
reportedly decided to request
a tax on chromium ores
instead of a ban after seeing
the Indian government’s
success in establishing a tax
on chromium ore exports.”
Companies in the News
American Talc Co.
11
FMC Wyoming Corp.
19
NRC
Angang
26
Foseco Plc.
26
Oregon Resources
Gencor Industries Inc.
12
Oglebay Norton Co.
Great Salt Lake Minerals
14
Oil Dri Corp.
19
Oil Dri UK Ltd
19
Omya AG
11
P&M Corp.
10
S&B Industrial Minerals
14
Sallies Ltd
12
ANSAC
Banaras Hindu University
14
106
Belvedere Resources Ltd
11
Harbinger Capital Partner
Bemax Resources Ltd
20
Hill & Griffith Co.
Benguet Corp.
Bosai Mining Co. Ltd
Botash
Carmeuse North America
6
10
14
8
Industrial Minerals Corp.
8
14
21
Int. Chromium Development Association 7
Kerneos
Laxness group
7
23
Milwhite Inc.
11
Chevron Mining Inc.
10
Mineral Deposits Ltd
21
6
SamChrome Ltd
6
Sherwin Aluminium Co.
10
21
7
Molycorp Inc.
10
US Bureau of Mines
6
Mondo Minerals
11
USGS
Energy Information Administration
14
Nanchuan Xianfeng Alumina
Finn Nickel Oy
11
Nashtec LP
November 2007
9
10
9
9
Sumikin Molycorp
Cofermin
Nabaltec
8
Samancor Chrome
Chromex Mining Plc
26
7, 21
27
Carnegie Minerals
Cookson Group Plc
10
Vesuvius
14,19,21
26
Vinacomin
10
WISCO
26
7
NEWS AT THE CORE
Oglebay Norton
nears sale
Carmeuse North America’s reason behind the purchase
of Oglebay Norton was its chemical grade limestone
used in the capture of emissions from power plants.
Courtesy JJ Willow.
Limestone producer, Carmeuse North America, launches
a bid for Oglebay Norton eyeing its chemical grade
limestone
by Simon Moores, Assistant Editor
THE END OF a turbulent
year appears to be in sight for
USA based industrial minerals
producer Oglebay Norton Co.
after Carmeuse North America
(Carmeuse NA) – the largest
producer of lime and limestone
products in North America
– launched a takeover bid.
This is following a period of
unrest at Oglebay where a major
shareholder, Harbinger Capital
Partner, publicly demonstrated
a lack of confidence with the
company saying it was “pursuing
acquisitions not in the best
interests of the shareholders” (see
IM August ’07, p.10).
Carmeuse NA, a member of
the Belgium based Carmeuse
organisation, said its rational
behind the foray is chemical
grade limestone. Phil Johnson,
senior vice president of Carmeuse
NA explained to IM: “We see
chemical grade limestone as a
strong and growing market and
we currently do not have enough
to supply demand.”
Johnson highlighted flue
gas desulphurisation (FGD) as
the specific application driving
8
demand: “Growth in the FGD
market has occurred as new
regulations take effect and there
has been an increased need for
desulphurisation agents.”
Thomas Buck, president
and chief executive officer of
Carmeuse NA said: “Oglebay
Norton’s considerable limestone
business provides us with added
resources to serve the rapidly
growing FGD market, in which
Carmeuse NA has a high level
of technical expertise. We look
forward to a quick completion
of this transaction and to the
seamless integration of our
operations.”
Carmeuse NA has offered
Oglebay a cash deal worth
$36.00/share, equating to a total
of around $700m. (£340m.).
Oglebay’s board of directors has
already accepted the bid and
“unanimously recommends that
all shareholders vote in favour of
the transaction.”
The transaction so far going
smoothly, but Oglebay still has
the right to cancel any merger
agreement should it receive a
better offer for its shareholders.
Carmeuse NA expects the deal to
be resolved in around a months
time.
Michael Lundin, president
and chief executive officer of
Oglebay said: “This transaction
with Carmeuse NA provides
meaningful and immediate cash
value to all of our shareholders.
“We are proud of the significant
progress we have made at
restructuring Oglebay Norton,
enhancing the company’s
financial flexibility and capitalising
on our strong competitive position
in minerals and aggregates”
Oglebay’s chemical
grade
Chemical grade limestone is
essential in the production of iron,
steel, lime and glass; it tends to
have a higher price and value
owing to its comparative rarity.
Oglebay produces high calcium
and dolomitic limestone from
numerous operations in the USA.
Oglebay has three operations
in Virginia producing high calcium
chemical limestone feedstock for
a variety of industrial applications.
Strasburg is the largest of the three
located 75km west of Washington
DC.
Strasburg’s chemical grade
limestone is a sorbent utilised
in the capture sulphur dioxide
emissions from coal fired power
plants. It is also used for the
neutralisation of acid effluents
and as a fluxing agent in the
manufacture of steel. These high
purity products are used in cement
and glass manufacturing, animal
feeds and other agricultural
applications.
Additional chemical grade
limestone production facilities
are located in Tennessee,
Pennsylvania, and Michigan.
Carmeuse NA will also be
buying a company that produces
construction aggregates from
limestone, ground calcium
carbonate fillers, glass sand and
stone.
This will complement Carmeuse
NA’s 6m. tpa of lime products
and 4m. tpa of chemical
limestone. It supplies products
to: FGD, road construction, steel,
water treatment, environmental
treatment, paper industry and
chemical industry.
Johnson of Carmeuse NA told
IM: “Our short term plans are
to expand our chemical grade
reserves. We have completed
a lot of due diligence [before
deciding to bid] and have been
impressed.
“To successfully integrate the
companies we need to first see
where we stand by taking several
months to meet the people and
evaluate skill set before making
inevitable changes.”
Buck said: “Oglebay Norton is
a strong company with world class
assets and outstanding employees
who we are proud to welcome
to the Carmeuse family… By
combining the resources of our
well established companies, we
will be better equipped to serve
the needs of today’s increasingly
competitive and dynamic
marketplace. This acquisition
provides a high level of market
diversity for Carmeuse.”
November 2007
NEWS AT THE CORE
Nashtec flame
retardant plant
returns
November 2007
hydroxide, boehmite,
magnesium hydroxide,
aluminium oxide, and synthetic
mullite.
Nabaltec’s outlook
Johannes Heckmann ,
technical affairs, of Nabaltec
outlined his positive market
forecast. He said: “Demand
for halogen free retardant
filler for the plastics and
cable industry continues to
rise. New forecasts predict
annual growth rates of 7%
for aluminium hydroxide, a
trend which will be reinforced
by action taken by some
US states to ban some
brominated flame retardants.
“The successful launch of
new Apyral® CD qualities
(Apyral® 50 CD and Apyral®
60 CD) creates new market
potential for Nabaltec outside
of the cable industry. Even
in non-cable industries,
we offer customers a clear
processing advantage due to
our higher processing speed.
The capacity situation for the
CD qualities continues to be
positive, so that full utilisation
of the capacity additions
planned for the third quarter is
assured.”
The ceramics division of
Nabaltec is also expecting
a bright future, according to
Heckmann. The high value
ceramic raw materials market
is buoyed by high prices
which is expected to result in
high utilisation of Nabaltec’s
facilities.
In addition, the strong
technical ceramics sector has
forced Nabaltec to move its
production into a new building
to allow for less delays.
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PRODUCTION OF FINELY
precipitated aluminium
hydroxide at US based
Nashtec LP is back and
running at full capacity after a
technical defect involving the
precipitation tanks resulted in
suspension of operations.
The Corpus Christi, Texas
based company, which
produces a capacity 25,000
tpa non-halogenated, flame
retardant fillers based on
aluminium hydroxide, had
to complete a series of
safety inspections before
recommencing production.
Nashtec was founded
in 2005 as a joint venture
between Sherwin Alumina Co.,
a leading US aluminium oxide
producer, and the Germany
based Nabaltec AG, which
produces functional fillers
for the plastics industry and
high quality raw materials for
technical ceramics.
In addition, a new
production line at Nashtec
began operation at the start
of October and will supply its
Apyrals® CD line – a sodium
oxide product used as a flame
retardant and a white pigment.
This increases the company’s
overall fine hydroxide capacity
by 13,000 tpa to 93,000 tpa.
The Nashtec operation
is adjacent to the Sherwin
Alumina plant and includes:
a precipitation area, drying
and filter facilities. Nashtec
claims it to be the most
technologically advanced
alumina plant for finely
precipitated aluminium
hydroxides in the world.
Nabaltec also offer flame
retardant and ceramic
products based on alumina
NEWS AT THE CORE
World class RE mine
reopens
CHEVRON MINING INC.
has successfully restarted
extraction circuits at its
world class underground
rare earth (RE) mine
at Mountain Pass. The
California RE operation
produces lanthanum
concentrate and didymium
(75% neodymium, 25%
praseodymium) product
from stockpiled RE
concentrates, and its
bastnasite resource is
the largest and richest
developed deposit mined
exclusively for REs in the
world.
Operations commenced
on 20 September 2007
with the loading of the
solvent extraction circuits,
and by mid-October, a
lanthanum concentrate
material is expected to be
produced, followed by the
didymium product later this
year.
Mark Smith, Chevron
Mining president and chief
executive officer, stated:
“Our ability to produce this
material is a real windfall
for our RE operations…We
want to be a significant
part of the RE industry
once again and this initial
production is exactly the
catalyst we need to regain
our position in the market.”
In 2006, Molycorp Inc.
– which merged with P&M
Coal to form Chevron
Mining – controlled
approximately 240m.
pounds of proven and
probable RE reserves
at Mountain Pass. REs
are used in a wide array
of high-tech products,
including hybrid cars,
communications systems
and advanced military
applications.
Mountain Pass is
committed to operating
incident and injury free and
its employees have worked
for more than two years
without a lost-time injury.
In 2006, the mine received
the Mine Safety and Health
Administration’s Sentinels
of Safety award for its
impeccable safety record.
Chevron Mining’s
portfolio also includes two
metal mines that produce
and market molybdenum
and RE concentrates,
oxides and compounds.
Obtained as part of the
Unocal acquisition in
2005, the metal operations
include the Mountain Pass
RE mine; a 33% interest in
Sumikin Molycorp, which
manufactures rare earth
neodymium compounds at
its facilities in Japan; and
a molybdenum operation
in New Mexico, USA. The
company is a wholly-owned
subsidiary of Chevron
Corp. and is headquartered
in Englewood, USA.
Interestingly, the US
National Research Council
(NRC) has issued a report
warning that inadequate
US domestic minerals
supply data could be
harmful to the nation’s
economy and national
security, and asking
whether the necessary
mineral resources be
available in time and at
acceptable costs to meet
burgeoning demand for
current and emerging
products and technologies.
The NRC committee
has applied a criticality
matrix to 11 minerals
groups including copper,
gallium, indium, lithium,
manganese, niobium,
PGM, rare earth elements,
tantalium, titanium, and
vanadium. Of those,
platinum group metals,
REs, indium, manganese
and niobium were
determined by the panel to
be most critical.
Al eastern promise
BOSAI MINING CO.
Ltd’s bauxite processing
subsidiary, Nanchuan
Xianfeng Alumina Co. Ltd,
is to start construction on
300,000 tpa aluminium
hydroxide facility in the
Nanchuan district of southwest China’s Chongqing
Municipality.
The company’s existing
Nanchuan underground
bauxite mine is the largest
abrasive grade bauxite
producer in China. The ore
10
reserves have been certified
at 20m. tonnes, and the
mine produces ~150,000
tpa of low-silica abrasive
grade calcined bauxite.
Operations are presently at
800 metres underground.
For export shipments to
North America and Europe,
the ‘Big Mountain’ brand
abrasive grade calcined
bauxite is shipped in
covered railcars from the
Nanchuan distribution yard
approximately 1,000km
to the south China port of
Fangcheng.
Viet Nam
The Viet Nam National
Coal and Mineral Industries
Group (Vinacomin) will
invest $1,600m. into a
bauxite and limestone
plant in central Binh
Phuoc province. Limestone
reserves will be used in
the province to produce
alumina for export.
Binh Phuoc province’s
limestone reserves currently
sit at 380m. tonnes in
Ta Thiet and some 87m.
tonnes in Loc Ninh district’s
Thanh Luong area. In
addition, the province
has a bauxite mine with
estimated reserves of
350m. tonnes.
The coal group also plans
to build a railway route
connecting with material
areas in the neighbouring
provinces of Dak Nong and
Binh Thuan.
November 2007
NEWS AT THE CORE
American Talc lands
Milwhite assets
AMERICAN TALC CO.
of Texas, USA has
strengthened its core
business after securing
the talc milling assets and
customer base of Milwhite
Inc. The deal sees
American Talc take control
of a milling facility located
six miles east of Van Horn,
Texas, USA.
American Talc’s general
manager, Steve Harms,
said that there has been
employee movement at its
other talc facilities as a
result of the acquisition.
He also added that
company reductions will
only be minimised through
generation of more
business.
Harms said that the
company has not taken
on any extra debt from
this acquisition. The
facility will now be known
as American Talc at
Wildhorse.
There was an additional
opportunity for American
Talc to acquire Milwhite’s
Tumbledown talc mine,
once its primary talc
source, however it was
rejected as it was close to
depletion.
Consolidation has been
highlighted as the key
rationale behind American
Talc’s acquisition, allowing
a central management
scheme to control
a number of its talc
operations.
Jim Herickhoff, president
of American Talc Co.
explained to IM: “ This
acquisition enables
American Talc to combine
three operations into one
singly managed, more
efficient and cost effective
operation.”
This most recent
of American Talc’s
acquisitions adds to a
number of investments over
the last few years.
Herickhoff said:
“Combined with last year’s
Suzorite acquisition and
the huge talc reserve base
acquired from DalTile
Corp., American Talc has
the opportunity to become
a significant player in the
US talc business.”
Van Horn in Texas is
home to a number of talc
producers all of which
mine from the Allamore
Formation, a 32km long,
6km wide talc deposit
which lies close to the
surface. Thick talc seams
ranging 10-500 metres
are hosted in marble and
phyllite rock.
General production has
suffered in recent years
following the changes
ceramic tile technology
with talc being used more
as an additive than a
major component of the
ceramic body ( see p.32
for a review on the Turkish
Ceramics industry ).
Milwhite, is located in
the same area as American
Talc in Van Horn, Texas
and produces fillers and
extenders through a
number of minerals besides
talc including celestite,
barytes, hydrated alumina,
calcium carbonate,
attapulgite clay, bentonite
clay, kaolin clay, slate,
mica, and microsilica.
The talc industry has
experienced a flurry of
activity recently including
the possible major
divestment of Omya AG’s
talc arm, Mondo Minerals
Oy of Finland ( see below )
and the major restructuring
at Rio Tinto Minerals’ talc
division Luzenac group
( see IM June ’07, p.15 ).
Mondo Minerals sells talc plant
MONDO MINERALS OY, the
Finnish talc company in the
process of being divested
from ground calcium
carbonate producer, Omya
AG, has sold its 200,000
tpa talc processing plant
located in east Finland.
The Luikonlahti mill and
concentrate plant has been
sold to Finn Nickel Oy,
subsidiary of USA based
Belvedere Resources Ltd.
Originally used as a
talc and nickel processing
facility with a 200,000 tpa
capacity for processing talc
November 2007
ore, Luikonlahti will now by
Finn Nickel to process nickel
and copper.
The purchase price is
€1.2m. ($1.69m.) with
additional payments
attached to the awarding of
an environmental permit for
continued operations on the
site, and production related
royalty payments.
Helsinki based Mondo
Minerals is seen as one
of the world leading talc
producers with operations
in Finland, Norway and
the Netherlands. It has a
760,000 tpa capacity and is
the second largest producer
in the world, behind Rio
Tinto Minerals’ Luzenac
group and the number one
supplier to the paper and
paint industries.
Mondo Minerals supplies
talc from vast reserves
across Finland that are
estimated to last for the next
40-50 years.
The sale of Luikonlahti
is an interesting move
considering Omya is in the
process of selling Mondo
Minerals to a private equity
company, Hg Capital, with
confirmation not expected
until 31 October 2007.
Wulf-Dietrich Keller,
chief executive officer of
Omya AG’s Finnish talc
division, Mondo Minerals is
expecting the European talc
producer to “fully realise
its potential by establishing
itself as a truly global talc
supplier”. He told IM: “For
now, the deal is not closed
and we are still part of the
Omya organisation.”(see
IM October ’07, p.6, Omya
divests talc arm).
11
NEWS AT THE CORE
Sallies misses JSE deadline
SOUTH AFRICAN
FLUORSPAR miner Sallies
Ltd has failed to report
its annual results before
the JSE deadline, but said
it expected to publish
them before the end of
October 2007 to avoid a
suspension by the stock
exchange.
“If we publish [our
annual results] before [the
end of] of October, we
will not be suspended. We
expect to be in time,” nonexecutive director Johann
Blersch said last month. At
the time of press, IM was
unable to confirm if the
annual results have now
been published.
Sallies said in a stock
exchange statement that
it had not been possible
to publish results to
June because of the
appointment of new
auditors and a recent
strike. The company ’s
payroll workers at its
Witkop mine went on
a three-week strike in
September 2007 following
a wage dispute.
When asked how the
industrial action had
affected the company ’s
ability to report financial
statements, Blersch
said: “It took a lot of
management time to
resolve the strike and this
is a small company.”
The company ’s auditors,
Ernst & Young, resigned
in December 2006 amid
concerns about Sallies’
ability to continue as
a going concern. The
auditing firm is believed
to have drawn attention to
irregularities arising from
the Witkop subsidiary ’s
inability to make pension
fund contributions, a
situation Sallies claim to
have rectified.
After Sallies reported
half-year results in April
2007, new auditors BDO
Spencer Steward again
expressed concern about
the future viability of the
company. BDO highlighted
the company ’s R19m.
($2.76m.) net loss for the
six months to December
2006, as well as the fact
that the group’s liabilities
at that time exceeded
assets by R26.2m.
($3.81m.)
Sallies chief executive
officer resigns
IZAK MARAIS HAS resigned
as director and chief
executive officer of Sallies,
the company announced last
month.
Marais joined Sallies in
2003 and was appointed
chief executive officer in
2005. In this time, he
was managing director of
fluorspar mines at Buffalo
and Witkop.
Speaking of his reason for
resignation on a Moneyweb
Power Hour on Radio 2000,
Marais said: “It’s been four
years and five months at
Sallies. We have worked
very, very hard. We’ve
built, I think, a formidable
team at Witkop, we’ve
acquired Buffalo, we’ve
had so much activity, we’ve
12
had Honeywell, we’ve had
x, y and z; and besides
everything that we’ve done,
we’ve still at this stage not
managed to turn profits for
shareholders. And I think
the perspective from my
side is that we now need to
give the helm to somebody
that can take a fresh look
at the business, take the
foundation that we’ve laid,
and take it to the next level,”
Marais said
“My view is honestly that
we need to give the charge
to somebody that can take
the business from where it
is now, totally focused; not
having any Honeywell issues;
not having the acquisition
portion of Buffalo that took
a lot of time and energy; not
having to go through the
re-thinking of the business.”
“[To resign] was a very
strategic decision that I’ve
had to take. It was a very
difficult decision for me
but, you know, we’ve got
fresh views in the business,
we’ve got guys that know
how to take it forward, and
I really believe it’s in the
shareholder’s interest at
this stage that we do that,”
Marais said.
Tom Dale, former director
of Gencor Industries Inc.,
managing director of Gold
Fields Ltd, and current
non-executive chairman of
Sallies (see IM April ’07,
p.27), has been appointed
as chief executive officer with
immediate effect.
In July 1999 Sallies
acquired a 100% interest
in Phelps Dodge Mining
(Pty) Ltd (renamed to
Witkop Fluorspar Mine
(Pty) Ltd and in its whollyowned subsidiaries,
Mosega Fluorspar Works
(Pty) Ltd and Marico
Fluorspar (Pty) Ltd, for
R78.96m ($11.47m.).
In July 2006, Sallies
purchased all of the
Fluorspar assets of
Transvaal Mining and
Finance Company (Pty) Ltd,
formerly trading as Buffalo
Fluorspar for R65m.
($9.44m.), and grouped it
all into a company named
Buffalo Fluorspar Mine
(Pty) Ltd, in which it now
holds a 100% stake (see
IM September ’06, p.13)
The company is currently
involved in a legal battle
with former customer, the
US group, Honeywell.
The matter has gone
into arbitration at the
International Chamber
of Commerce in Zurich.
Honeywell is claiming
US$6.8m. in damages for an
alleged breach of contract
after Sallies terminated
it sales with Honeywell;
Sallies is claiming $1m.
from Honeywell for fluorspar
apparently delivered but
which has not been paid for.
Discussion on all the
trends and events in the
market will be held at IM’s
Fluorspar 07 conference,
5-7 November, Frankfurt,
Germany. CALL FOR
PAPERS: please submit
any offers of papers to
Dorothee Archambault at
darchambault@indmin.
com or telephone +44
(0)20 7779 8110.
November 2007
NEWS AT THE CORE
S&B Industrial Minerals acquires
bentonite and carbon plants
GREECE’S S&B
INDUSTRIAL Minerals SA
has signed a definitive
agreement to acquire the
bentonite and carbon
activities of the Hill &
Griffith Co. in the USA.
The purchase price has
been set at $13.4m.,
and includes product
inventories estimated at
$1.7m.
The activity comprises
the design and production
- in four blending plants
- of proprietary bentonite
based sand binders used
in US foundries for casting
applications. The blending
plants are located in Ohio,
Illinois and Alabama
The four new acquisitions,
in addition to the existing
bentonite plant in Georgia,
which has an annual
capacity of 50,000
tonnes, will allow S&B to
offer broader integrated
solutions to the American
foundry market, based on
S&B’s advanced knowhow in blended bentonite
products. The total
production capacity of the
after the acquisition will
be approximately 200,000
tonnes.
Kriton Anavlavis, the
general manager of
S&B’s bentonite division
said: “This acquisition
represents one more step
in S&B’s bentonite related
products geographical
expansion. The addition
of the Hill and Griffith
capabilities tour “Marketto-Mine” chain will allow
us to provide broader
customised industrial
solutions to our new
customer base in the USA.”
Ansac still to clear cartel claims
A DISPUTE OVER claims
made nearly eight years
ago is still rumbling on
today. Botswana Ash (Pty)
Ltd (Botash) claimed back in
2000 that American Natural
Soda Ash Corp. (ANSAC)
behaved like a cartel for
soda ash exports in South
Africa.
ANSAC is now fighting
to overturn the decision of
the South African Supreme
Court of Appeal (SCA) to
dismiss ANSAC’s request
to hear the matter – to do
this it is appealing to the
Constitutional Court.
Botash originally claimed
that the export group,
ANSAC, sells soda ash into
southern Africa markets
at a lower price than
its members sell to US
customers. Imports from
ANSAC, a consortium
that negotiates exports for
US soda ash producers,
were blamed for the
liquidation of former Botash
incarnation, Botswana Ash
in the 1990s.
The first judgement was in
2000 which ruled ANSAC
fell foul of Section 4 of
the Competition Act; this
was referred to a tribunal.
Problems since have
surrounded an argument
involving whether or not
the South African tribunal
had jurisdiction over a
US associations, and the
interpretation of Section 4.
ANSAC is also unhappy
that Botash is acting as an
intervener in the case; it
has appealed for Botash’s
removal to no avail, the
series of a number of
unsuccessful appeals. It
is now turning to the
constitutional court on the
grounds of unfair treatment.
ANSAC is the world’s
largest soda ash exporter
with sales of around
US$500m. (£245.7m.). It
has five plants all based in
Wyoming, USA for its supply
of soda ash from vast
reserves estimated to last
around 1,300 years.
With the USA supplying
25% of the world’s soda
ash, the market for exports
is substantial. Of ANSAC’s
total exports, 45% is kept
in the USA, around 10% is
exported to east Europe, 5%
to west Europe, and 10% is
shipped to China.
Warnings over mineral market tremors
IN A REPORT published on
5 October 2007, a panel
of US academics says
that the existing Minerals
Resources Program at the
US Geological Survey
(USGS) in Virginia does
not have the resources,
authority or autonomy
required to track the
supply and demand of
valuable minerals for
industrial applications.
14
It suggests that the US
should establish an agency
to track markets for
minerals that are critical
components of industrial
products
It cites the Energy
Information Administration
(EIA) - set up in
Washington DC in the
wake of the 1973 oil
shock - as a model for
a future federal agency.
Unlike the EIA, the USGS
has no legislative authority
to demand market
information from industrial
companies and no right to
publish data independently
of its parent agency.
“We need quality
information to be able to
assess the vulnerability to
disruption,” says Roderick
Eggert, chair of the panel
and a mineral economist
at the Colorado School of
Mines in Golden.
Booming demand for
minerals in India and
China suggests that
historical trends might
be an unreliable guide
for the next few decades,
said Thomas Graedel,
another of the report’s
authors and an industrial
ecologist at Yale University
in Connecticut.
November 2007
NEWS AT THE CORE
NEWS IN BRIEF
Sulphate of potash
price rise
Great Salt Lake Minerals
(GSLM) has announced a
price increase on sulphate of
potash (SOP) speciality fertiliser
products. GSLM who sells
SOP based products through
its subsidiary, Compass
Minerals International Inc.,
announced price rises in
relation to shipping.
The price rises for SOP
speciality fertiliser products
are: $35/s.tonne on
shipments to the USA and
Canada which comes into
force 1 December 2007;
and $60/s.tonne on all
international shipments,
effective immediately.
Compass Minerals provides
de-icing salt for roads to
North America and the UK
(see p.52 for a review on
MgCl2 v CaCl2 for de-icing
and de-dusting).
FMC Wyoming ups
soda ash price
Higher natural gas prices has
cause USA based sodium
carbonate and soda ash
producer, FMC Wyoming
Corp., to increase its soda
ash price by $15/tonne in
October.
FMC Wyoming said its
current energy surcharge
and freight policies for soda
ash will remain in full effect
indefinitely. It confirmed the
energy surcharge base cost will
be revised to reflect the current
natural gas price range.
Mineral PriceWatch
September ‘07 reported
the price of natural, dense
Wyoming soda ash (bulk FOB)
between $180-200/s.tonne.
The price of all grades of
bulk and packaged soda ash
increased from 1 October
2007; FMC Wyoming state it
will not to exceed the current
list prices.
November 2007
Oil Dri buoyed by
record sales
The major producers
of sodium bentonite,
clumping litter are Oil
Dri in North America
and Tolsa in Europe.
Courtesy Tolsa
PRICING AND EXPANDED
distribution of private label cat
litter have been highlighted as
a key factor in Oil Dri Corp. of
America’s record sales.
The world’s largest cat litter
producer, which manufactures
the “Cats Pride” and “Johnny
Cat” brands, also attributed
improved manufacturing
productivity and cost reduction
programs to the recent
success.
A 3% increase in net sales
from the same period in
2006 was reported by Oil
Dri, equating to $212.2m.
(£104.2m.). Net income for
the fiscal year was $7.6m.
(£3.88m.) or $1.09/diluted
share – a 49% increase on the
same period last year.
The majority of cat litters
in the industry are from
heavyweight clays such as
sodium bentonite (a clumping
litter) and calcium bentonite
(non-clumping traditional
litter). The lightweight clays
(attapulgite and sepiolite) and
non clays (diatomite, silica
gels, vermiculite, perlite) are
used to a lesser extent.
President and chief executive
officer Daniel Jaffe said: “Our
net sales per tonne have
increased steadily over the last
five years. This pricing strategy
is consistent with our corporate
mission of creating value from
sorbent minerals.”
Oil Dri is a key player in
the North American cat litter
industry, supplying major
marketing companies. Oil Dri
supplies Wal-Mart Stores, Inc.
with its “Special Kitty” brand
and The Clorox Co. with
its “Fresh Step” brand – this
private label selling method
increased by 10% (along with
industrial and automotive
products) in Q4 2007.
Oil Dri also has a presence
in Europe with Oil Dri UK
Ltd, which packages clay
granules produced by the USA
operations. Oil Dri UK creates
a composite, lightweight litter
of attapulgite, quartz, and
gypsum, and is marketed
under “Cat’s pride” and “KittyDri”.
Oil Dri mines, manufactures
and markets both traditional
and clumping cat litters fed
from five main US based
bentonite mining operations:
Ochlocknee, Georgia;
Ripley and Blue Mountain,
Mississippi; Mounds, Illinois;
and Taft, California.
Jaffe added: “Our future
growth is dependent upon
our ability to deliver new and
innovative products and we
are committed to making that
happen while staying true
to our mission. In addition,
we will remain focused
on manufacturing process
improvements and cost saving
initiatives.”
The majority of the global
cat litter industry activity is in
North America and Europe.
Oil Dri’s presence in both put
it in good stead for the future.
Bob Virta, mineral
commodity specialist for
the US Geological Survey
explained the current North
American cat litter market. He
told IM: “Current markets for
cat litter in North America are
doing well. There were 93m.
households with cats in the
USA in 1990 and 113m. in
2005.
“An increase in demand
for kitty litter is reflected
in the increase in sales of
bentonite and fuller’s earth
for this application… Even
if the percentage household
ownership declines slightly
in the USA, there are more
households being established
with an expanding population.
Cat ownership, at a minimum,
should remain constant.”
See IM August ’07, p.66 for
a review of cat litter clays v
non-clays.
19