Freight rates drop as more ships become available – Assore

Date: Feb 29, 2019

Freight rates have dropped quite substantially since the iron-ore tailings dam tragedy in Brazil ,with more vessels becoming available, Assore CEO Charles Walters reports.

Since the Brumadinho dam disaster, some 30-million tonnes of iron-ore supply have been withdrawn from the market.

Walters, together with Assore CFO Ross Davies and Assore growth and strategic development executive director Kieran Daly, provided wide-ranging insight into the iron-ore, manganese ore, manganese alloy and chrome mining and marketing company, which is:

looking to balance what it returns to shareholders and what it retains in the business for reinvestment, to keep the business as efficient as possible;

spending capital on the Black Rock manganese mine expansion project and the Gloria manganese mine modernisation project in the Northern Cape, as well as investing in the Dwarsrivier chrome mine in Mpumalanga;

continuing to work closely with State-owned rail company Transnet to improve iron-ore logistics and also the railing of chrome from Steelpoort to Richards Bay;

benefitting from an increasing manganese intensity as China ramps up production of higher quality steels;

continuing with ongoing brownfield exploration drilling around its Khumani and Beeshoek iron-ore mines;

holding thumbs that its increased investment in greenfield exploration company IronRidge, which is drilling for metals and minerals in Ghana, Ivory Coast and Chad, will bear fruit; and

looking to the hot sun of the Northern Cape to potentially provide cost-effective solar power to its strongly performing mines in the province.

Assore’s jointly controlled Assmang recorded headline earnings of R4.29-billion, an increase of 23% on a 100% basis, which made a R2.14-billion headline earnings contribution. Assore owns 50% of Assmang, which it controls jointly with Patrice Motsepe’s African Rainbow Minerals (ARM).

The six months to end December were dogged by inland logistical snags, but only affecting iron-ore and chrome and not manganese ore and manganese alloys, which enjoyed problem-free logistics.

The 4% fall in iron-ore production and sales in the period was linked to the Sishen–Saldanha iron-ore line coming to a halt in November after a truck carrying heavy equipment at excessive height on a public road smashed into one of the line’s bridges, damaging it beyond repair and preventing State-owned rail company Transnet from performing its required rail export operations.

However, intense collective action resulted in the 861 km line – which extends from mines in the Northern Cape to the Port of Saldanha, in the Western Cape – being back in action ahead of schedule, which allowed South Africa’s important iron-ore exporters to resume the earning of vital foreign exchange quicker than expected.

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