http://www.bdlive.co.za/ (South Africa)
DUBAI-based Russian businessman Alibek Issaev has teamed up with South African businessman Abbas Moti to develop a low- and medium-carbon ferrochrome smelter near Rustenburg that they claim will transform the ferrochrome business.
Mr Issaev is taking a 50% stake in private South African company FerroChrome Furnaces (FCF), which is controlled by the Moti family for an undisclosed amount.
The plant is at the commissioning stage and the aim is to boost production of low- and medium-carbon ferrochrome to 420,000 tonnes a year over the next 24 months, targeting a business that is dominated by ferrochrome producers located in Kazakhstan and Russia, in particular Eurasian Natural Resources Corporation.
Also involved in the deal is former Sentula Coal chairman Sir Sam Jonah. According to FCF spokesman Ashruf Kaka, Sir Sam is the nonexecutive chairman of FCF but has no business stake in the transaction and is only involved because of his long-standing friendship with the Moti family.
Sir Sam was not at Wednesday’s presentation in Johannesburg. He used to be invested through Jonah Capital in JSE-listed Andulela Investment but sold out in 2009.
Mr Kaka, who is CEO of Andulela, said Mr Moti was invested in Andulela through a family trust.
Sir Sam has been absent — in public at least — from the South African mining scene for several years following his departure from Sentula after which he said he intended focussing on his oil and energy interests in West Africa.
Mr Issaev said: “We aim to corner the low- and medium-carbon ferrochrome supply markets during the next two to three years and, if that means a price war to achieve market share, we are ready to do battle and we have the resources to do so.”
According to Udo Heck, MD of German firm Metal Partner, which will be doing the marketing, the new project did not intend competing with Glencore Xstrata – the world’s largest ferrochrome producer.
“That’s a fight we would lose,” Mr Heck said stressing that FCF was targeting a different sector of the ferrochrome market to that dominated by Glencore Xstrata.
He said low- and medium-carbon ferrochrome was a niche business accounting for about 1-million tonnes of the global ferrochrome market of about 11-million tonnes. The bulk of that demand was for the standard high-carbon or “charge” ferrochrome produced by the South African companies.
For the original version of this article, click here: http://www.bdlive.co.za/business/mining/2013/09/18/new-business-venture-aims-to-transform-global-ferrochrome-business