Afarak Group’s South African subsidiary has signed an agreement to acquire a 70% stake in Afrika Mineral Trading & Investment Trust’s (AMTIT) Zeerust chrome mine (ZCM).

The remaining 30% stake will be allocated to workers, the community, and other black economic empowerment (BEE) partners.

The R20m ($1.49m) transaction is expected to complete over a period of one year.

The mine is said to have an opencast ore resource of around two million tonnes, with an additional capacity of the 1.2 million tonnes tailing dump.

Afarak Group CEO Guy Konsbruck 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.

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“The mine is said to have an opencast ore resource of around two million tonnes, with an additional capacity of the 1.2 million tonnes tailing dump.”

“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.”

Afarak is expected to make use of shaking table technology to produce significant quantities of low-cost concentrate from the tailings.

Alongside the mine, the acquisition includes an existing processing plant, which has a production capacity of 15,000t a month.

Subject to documentation and completion of the final legal due diligence process, the final sale and purchase agreement is scheduled to be concluded during next month.