Confessions of a chrome ore junkie

I am 30 years old – a family man. I used to work at a mine. Now my regular job is as a facilities manager at a bank in Johannesburg. In my free time, I do something else.

I export chrome ore.

I sell to customers in the car industry in Korea and China. For that I mainly use an agent, who I met through my brother-in-law. He works for a large black economic empowerment (BEE) company with a lot of business in mining and the petrochemical industry, and they use this agent for business in Asia.

There are thousands like me. Families are built on this business. I know one woman: she has been doing this for many, many years. She’s put her kids through school with this business; bought them clothes, food and a roof.

Me? I’ve been doing it for seven years, on and off. My most productive years have been the last two. I work with guys who are doing this full time. But it’s hard to be lucrative in this business.

I buy my rocks from the mines directly, if I’m lucky. This determines how much money you put into your pocket. If you buy directly from the mines, there’s no mark-up. Otherwise I pick it up from others who have bought the rocks from a mine.

To buy from the mines is hard work. You have to have the right contact inside the mine, someone you can trust and who knows the mine schedule.

It can be tricky. There is a lot of betrayal in this business. The chrome business is known as a criminal industry for good reason. People can cheat and steal, even those with whom you’ve been dealing for years.

I have had to do some underhand activities for deals to come through. I’ve had to entice people to give me the rocks.

In the perfect world, I know the mine manager, who knows the mine schedule and what gets left over. I would be there for the leftovers. These rocks, in the quantities I take, are insignificant for the mines.

You must have a lot of luck in this game and be resourceful. Your contact can always turn around and give you the bad rocks, saying: “take it or leave it”. There’s a lot of delicate manoeuvring to be done around people’s egos and appetite for money.

I buy from open-cast and underground mines. I have bought from ferro-chrome producers’ mines. This can be difficult. It’s a small network because this is not something the mines normally allow.

I pick up the rocks from the mine – not big loads, say, 5,000 tonnes of rock. I then transport them to a plant – the shorter the distance, the better, because then my fuel costs are lower – where I wash them and crush them into a concentrate.

The plant is owned by a man who has been doing this for years. He had been building the plant up for many, many years, buying the equipment and supplying his facilities to people in my business. That’s what he does, that’s his business model.

If I’m lucky, my concentrate would end up with a 39-41% chrome content. That gets me a better price.

I would seal this concentrate into a container and send it to the railway depot outside Pretoria, from where it would be taken by train to Durban.

At the port, the container is opened again and the concentrate tested, so the buyer can be sure the shipment was not swapped, sealed again, shipped. When the buyer receives the container on the other side, I get my money.

Profit margins are not bad; it depends on the market. One time I bought rocks at R50 ($6.43) per tonne. I sold it for R950 per tonne. Transport at the time was about R1 per tonne per km. That’s only for getting the rocks to the washing and crushing plant, and getting the concentrate to the depot. The rest of the transport costs are the buyer’s problem, although that depends on the terms you negotiate with your buyer.

But it’s not always that good. At the moment the market is tough. I haven’t done any business for the last six months. I can’t get the right price. The transport costs have increased dramatically because of the huge fuel price hikes.

The new E Toll [a controversial new toll road set for launch at the end of April on the highway between Pretoria and Johannesburg] will further increase transport costs.

Still, if you’ve got some rocks, or know someone I can buy from, my agent says the customers in Korea and China are still looking for the ore, and maybe I can get the right price if they’re desperate enough.

I’ve heard about a proposed chrome ore export tax and that ferro-chrome producers are shutting down smelters, but these things don’t affect me. Maybe an export tax is a good thing. Maybe there needs to be more control over our natural resources. But for me right now, I just do business. I am black. My government doesn’t give me the tools to own any of these mines. So this is what I can do to extract some value. 

I am 30 years old. A family man. My regular job is that of facilities manager at a bank in Johannesburg.

But in my free time I export chrome ore.

As told to Bianca Markram 
editorial@metalbulletin.com