Afarak Group plc, through its South African subsidiary Afarak Mining Ltd, has reached an agreement in principle to acquire a 70% shareholding in ZCM (Zeerust Chrome mine) from Afrika Mineral Trading & Investment Trust (AMTIT), with the remaining 30% to be allocated to workers, community and other BEE partners.
The transaction will amount to ZAR20 million and will be effected over a 12-month period.
The conclusion of the final sale and purchase agreement is planned during October 2017, subject to documentation and completion of the final legal due diligence process.
The ZCM mine has an opencast ore resource of about 2 million t if mined up to 35 meters high wall. Additional capacity exists in the 1.2 million t tailing dump. Afarak has amassed extensive expertise with shaking table technology, which it already employs in its mining operations in South Africa and Turkey, allowing it to produce significant quantities of concentrate at a comparatively low cost from the tailings.
In addition to the mine, the assets to be acquired include an existing processing plant, with a production capacity of 15 000 tpm, 900 ha. of farm land and 20 houses.
Guy Konsbruck, Afarak's CEO, said: "This acquisition further bolsters our position as a leading specialty alloys producer. Afarak specifically targeted ZCM due to the unique quality of its chrome ore. By leveraging our in-house technical expertise and controlling our own production of ZCM high quality ore, we are now in the position to make Mogale the only South African smelter capable of producing High Carbon FeCr, further differentiating our product range and increasing the contribution of higher yielding specialty alloys in our production output."