This company’s objective is to become chrome ore supplier to international manufactures of stainless steel. Our initial sale focus will be international emerging market.
Our priority is to buy raw chrome ore dumps from the Mines in Rustenburg, purify it at the washer plant and sell it to our target market. However, the product is being sold excluding the logistics and in this case we will lease truck (through the bank) or hire transport from the mine. A transportation cost from the mine to the washer-plant is $20 per Metric ton for every 100 km. The first chrome dump is 300 000 MT in quantity for which we can buy at $60 per MT and resell it for a price between $250 and $290 per MT after logistics and purification. Washing the product will cost us $20 per MT. In order to get one metric ton of pure chrome we will need to wash 2 MT of raw ore. It will take us two weeks to have a purified chrome ore from the washer plant for the quantity of 10 000 MT. Furthermore there are other dumps that are available at the sight of the mine which can be offered after finishing the first one.
Value chain structure
2.5 Ton Chrome Ore one ton ferrochrome 4 tons stainless steel
In order to produce one ton ferrochrome, 2.5 tons
This process involves purification of the product in the mine washer plant. It usually takes two metric ton of raw product to produce one metric of purified chrome ore of needed for conversion into ferrochrome. This purified chrome ore normally comes out with the specification of 42-48% needed by most buyers. From that moment onwards the product (chrome ore) will be ready for sale.
Capacity is based on the order that we have or anticipate to have, and we plan to produce close to 20000 Metric ton per month. The mine selling close to 1000 000 Mt of raw chrome ore dumps and we plan to buy the first batch of 300 000 Mt. Our goal is to convert the raw product into 100 000 Mt, of which will be able to sustain the company for the year. We will also buy another 100 000 Mt when we finish with the purification and the sale of the first one.
2. Production Schedule
Production will take place at the mine washer plant in Mooi-Nooi in Rustenburg where the raw chrome ore is received for purification. The distance between the mine dumps and washer plant is 100 km and we intend to use the trucks from the mine for distribution. If the transportation cost are heavy we intend to have a lease agreement of (20) 34 Ton Side Tipper Trucks with our bank.
China is the major consumer of chromite ores produced worldwide. The majority of chromite ores imported into China over the last decade have been from South Africa, Kazakhstan and India. India has made exporting of chromite ores to China more difficult by imposing a tax of almost 40%. The rising demand for stainless steel and the rapid expansion of stainless steel industry in China is creating a worldwide shortage of Chromite Ores. This allows new suppliers from different parts of the world become new player in the Chinese chromite market. One of these new players is PowerEdge, and this is where we fit in. In December 2007, China imported 460,000 MT of Chromite ores valued at US$135 million. From January to Dec 2009, China imported a total of over 8 million MT of Chromite Ores valued at US$3.6 billion. This represented an increase of over 100% in terms of quantity imported and an increase of 110% in terms of dollar value.
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