Menar acquires Metalloys ferromanganese plant

News Analysis




Menar acquires Metalloys ferromanganese plant

Menar Capital and Ntiso Investment Holdings, have signed a binding agreement to fully acquire Samancor’s Metalloys manganese alloy smelter complex based in Meyerton, South Africa.

Menar's acquisition of the manganese plant follows its announcement of the underground manganese project at the East Manganese mine in South Africa's Northern Cape province. The Metalloys plant, dormant since 2020, was placed on care and maintenance by Samancor due to challenging market conditions during the global economic slowdown caused by the pandemic. Despite expectations of reopening, the plant remained offline, prompting considerations regarding its future economic viability. This trend aligns with several South African ferroalloy producers who suspended furnace operations during the same period, partly due to the pandemic and also due to escalating energy costs and increased load curtailments. Currently, the nation's only operational ferromanganese facility is located in Cato Ridge. Menar's acquisition of the Metalloys plant may reflect a strategic response to the evolving energy landscape in South Africa.

The energy landscape in South Africa has undergone a positive shift, with the energy availability factor climbing from 56% to over 70% in recent months. This improvement stems not only from Kusile’s unit three coming back online but also from the increase of alternative energy sources, removing demand from the grid. In 2023, the country imported over 5GW equivalent of solar panels, reflecting a growing inclination among households and businesses towards renewable energy sources. Currently, the private sector in South Africa is spearheading a 9GW pipeline of energy projects encompassing solar, wind, gas, and battery storage. Of this, the mining industry is leading approximately 7.5GW, with investments exceeding US$8.2bn. An estimated 3GW of private sector electricity generation will be operational by the close of 2024. However, given the intermittent nature of solar and wind energy, Eskom will continue to serve as a primary source of baseload electricity supply for the mining sector.