The company had been trying to sell its chrome mining asset for over a year, but until recently had failed to find an interested buyer. The asset consists a 74% stake in the Rustenburg chrome ore mine.
Lanxess, which is also in the process of completing the sale of its chrome chemicals business in South Africa, will be left with no outstanding mining operations in the country once the sale is completed.
Sources at the company put the mine’s capacity at around 250,000 tonnes per year, between metallurgical, chemical and foundry grade chrome ore.
According to company sources in contact with Fastmarkets, the costs of running the mine had been “really high” compared with its main peers in the space and the owner, whose core business is in downstream specialty chemicals, had been trying to offload the asset for some time.
The company had originally planned to sell the mine before it sold the chemicals business but eventually found a suitable buyer for the chemicals business first.
Rainier van Roessel, member of the board of management at Lanxess, said in a statement: “We have clearly focused our portfolio on specialty chemicals in recent years. Following the sale of our chrome chemicals business, it is therefore strategically logical to also divest our stake in the chrome ore mine as a key source of raw materials for this business.”
The sale of the mine to Clover Alloys is expected to be completed by the end of 2020, Lanxess said. A 26% shareholding in the mine will remain with DIRLEM, a minority shareholder representing employees and some private investors.
The value of the transaction was not disclosed.
Chemicals business divestment
Earlier this summer, Lanxess had agreed to sell its South African chrome chemicals business to Chinese buyer Brother Enterprises, a leather chemicals producer.
Sources at the company told Fastmarkets this week the sale is expected to be completed by the end of December.
The business consists of two sites, both in South Africa, in Newcastle and Merebank.
The Newcastle plant produces about 70,000 tpy of sodium dichromate, although sources stated output could be higher. Merenbank produces chrome tanning salts from sodium dichromate for the global leather industry.
The Newcastle plant is being taken over by Brother Enterprises, while Lanxess will continue to manufacture chrome tanning salts for Brother Enterprises on a contract basis until 2024.
Lanxess’ other chrome chemicals operation in Argentina was sold in 2017.
Fastmarkets assessed the price for chromite, chemical, 46% Cr2O3 min, wet bulk, fob South Africa at $160-210 per tonne on November 12, compared with $230-290 per tonne at the beginning of the year, owing to bearish market conditions.