“We have proven that Tharisa has a robust business model. We set out to become a leading resource group, and our 2017 shows we are on track,” said Tharisa executive chairperson Loucas Pouroulis.
Financial highlights included the 59.1percent hike in group revenue to $349.4million (R4.77billion) from $219.6m last year, mainly on the back of the metallurgical grade chrome concentrate price, which increased by 66.7percent to $200 (R2732) a ton from an average of $120 a ton.
In terms of production, 5million tons of reef, an increase of 3.9percent, while 1.3million tons of chrome concentrates was produced, up by 7percent.
Next year, the company expects to produce 150000 ounces of PGMs and 1.4million tons of chrome concentrates, of which 350000 tons will be speciality grade chrome concentrates.
Tharisa’s vision for 2020 is to produce 200000 ounces of PGMs and 2million tons of chrome. It lived up to its promise of awarding its shareholders, generously proposing a US5cents a share dividend on improved earnings.
It also announced that its dividend policy for the 2018 financial year would be changed to provide for a payout of at least 15percent of consolidated net profit after tax, an increase from the previously stated policy of at least 10percent of consolidated net profit after tax. The company also unveiled plans to introduce the payment of an interim dividend.
The company said that it was robust about the future.
“The management team is positive about the prospects for the year ahead and believes that with the direct control of our mining operations and a strong focus on run-of-mine quality further economies of scale will be demonstrated through reduced unit costs and increasing operating margins and profitability,” the company said.
The company also said that it had “witnessed history” in the first half of the year with record prices for metallurgical chrome concentrates being achieved at about $390 a ton.
“There was, however, limited liquidity and an underestimated global supply side response which displaced a large portion of South Africa's market share,” the company said.
Prices subsequently declined to levels as low as $130 a ton, mainly on the back of accumulated inventory levels.
Post the half-year the company said it saw a recovery in the spot metallurgical grade chrome prices delivered to China, this due to increased demand for stainless steel and excess inventories being absorbed in the normal course.
During the period Tharisa transitioned from a contractor mining model to an owner mining model, through its purchase of mining equipment from MCC Contracts, and included the employment of 900 MCC employees effective October 1.
The company also entered into a five-year strategic co-operation agreement with steel producer Taiyuan Iron & Steel (Tisco’s) joint venture company Shanxi TaigangWanbang Furnace Charge in September.
Tharisa shares fell 0.53percent to close at R18.75 on the JSE yesterday.
- BUSINESS REPORT