Tharisa seeks growth and gaps in Africa

Tharisa seeks growth and gaps in Africa

THARISA, a chrome and platinum mining company, is looking for growth in stainless steel commodities as its new mine reaches a steady state, and for opportunities in Africa to give it geographic diversity.
Cyprus-based Tharisa, which is listed in Johannesburg and London, was scouting for shallow chrome and platinum mines to add to its portfolio, CEO Phoevos Pouroulis said.
Tharisa operated a new open-cast chrome and platinum mine near Brits in the North West, and the intention had been to start looking for growth once the asset was at or near steady-state production, he said.
“Our strategy is to look at PGMs (platinum group metals), chrome, and other stainless steel raw materials as the first port of call for growth and expansion,” he said.
“We have assessed a number of opportunities that have come across our desk during the first commodity cycle. There’ve been a number of distressed assets and business-rescue opportunities, but we’ve walked away from them because we’ve seen them as dilutive to the Tharisa investment case,” he said.
“We are looking, but we’ve not identified anything yet. In the short term, it’s not that easy to execute our growth strategy,” he said.
Tharisa had assessed the mineral manganese, but it was a segment of the market that was struggling, and Tharisa had to buy a mine in the lowest-cost quartile.
Tharisa reported an interim profit of $3.1m for the six months to end-March, a 36% fall from $4.9m a year earlier, dragged down by sharp falls in the prices of chrome and the PGMs it produces.
Tharisa’s mine increased PGM output 4.5% to 60,000oz of the six elements that make up the basket of metals it produces. Chrome concentrate was 7% higher at 604,400 tonnes.
“The six months under review were characterised by a challenging macroeconomic environment, where global commodity prices declined materially, before recovering towards the end of the second quarter,” Tharisa said.
In dollar terms, the PGM price fell 27% to $686/oz, and metallurgical grade chrome prices dropped 32% to $106/tonne. A weakening rand offset these declines. The rand price for the basket of PGMs fell 4% to R10,448/oz, and the chrome price was 13% lower at R1,562/tonne.
Tharisa expects to produce 147,400oz of PGMs when it reaches steady state production and 1.33-million tonnes of chrome concentrate. To offset lower metallurgical chrome prices, Tharisa has stepped up output and sales of specialty grade chrome concentrates, which now account for 17% of chrome sales, or 106,000 tonnes, compared with 10% a year earlier.
Tharisa wanted to have 23% of its chrome sold as specialty chrome, which had diverse markets in the Americas, Europe, and Asia, reducing its exposure to China, which was the primary buyer of the company’s metallurgical chrome, Pouroulis said.
Since the end of March, PGM prices had increased to $715/oz, and chrome prices had risen to $150/tonne, while the rand had weakened against the dollar to about R15/dollar, Tharisa said.