1967 - Gold Fields decides to convert the closed Vogelstruisbult uranium plant into an electrolytic zinc plant. Iscor, Vogelstruisbult Metal Holdings and Gold Fields formed a joint venture and in April 1968 the first zinc ingot was cast and then sulphuric acid was produced in December the same year.
1999 - Gold Fields sold its majority shareholding to Iscor, which later unbundled and Zincor became part of the base-metals division of Kumba Resources. 2006 (November) Kumba Resources once again unbundled to form Kumba Iron Ore and Exxaro Resources. Zincor is now a division of Exxaro base metals

Zinc
Roaster

October 24, 2011 - In December, the price of zinc and sulphuric acid will forever change as the country’s only zinc refinery, Zincor, closes down.  At the same time, hundreds of Springs residents will ponder their economic future as their retrenchment packages pay out.  The ripple effects of Exxaro’s decision – both positive and negative – to close down the refinery is already spreading in manufacturing circles as 48 of Ekan Base Minerals employees were retrenched last week.  The firm manufactures aluminium sulphate, which is used in water purification. More importantly however, it is the only producer in Sub-Saharan Africa.  CEO Pieter Nel explains that the factory, located right next to Zincor and fed directly via a pipeline, was bought a mere six years ago. The increase in sulphuric acid transportation costs from different suppliers means that costs had to be cut elsewhere: the staff compliment.  Nel first heard about the refinery’s closure in the media. He has been trying in vain for months to secure additional funding to save his employees’ jobs. The last resort was retrenching.  However, not all industry players are equally perturbed by Exxaro’s move, including galvanisers. Bob Wilmot from the Hot Dip Galvanizers’ Association Southern Africa, says that the local industry was “totally beholden to Zincor”.  This is because a local supply made importing difficult and expensive. Now, the market is expected to open up as multiple traders take up the slack. In the short term, he says, the zinc price is expected to increase as the new market finds its feet. Thereafter, prices should decrease as competition increases, but imported zinc will still be more expensive in the long run.  Willie Engelbrecht, Spangle Galvanisers director, says while there will be price increases, all galvanisers are in the same boat. He says they have been aware of the impending Zincor closure for some time and are already talking to traders to secure a zinc supply.  Exxaro has been trying to sell the Zincor refinery for almost two years. The zinc price has been relatively stable for a number of years and higher local input costs eat into margins. Moneyweb previously reported that electricity prices were expected to account for 50% of the absolute business’ cost (excluding materials) by 2012. According to Exxaro Finance Director Wim de Klerk, electricity accounted for R50m of a total R600m cost in 2006 but that number would increase to R350m of a total R700m absolute cost.  In addition, the plant has been in operation for a long time and it was commissioned as a zinc refinery in 1968. Previously, the site belonged to Gold Fields.  In a media release, CEO Sipho Nkosi, said that the zinc-making operation “has proved to be un-saleable to potential investors; continued zinc-making is financially unsustainable with Zincor incurring mounting financial losses; and turn-around and improvement interventions have proved fruitless and are unlikely to get Zincor on to a sustainable financial performance level”. Media reports also state that about a third of the 796 employees will be retrenched.  Duncan Hobbs, a senior analyst at advisory firm Macquarie, is of the opinion that the possibility of a new zinc refinery being built in South Africa is extremely unlikely. The main reason is that the zinc manufacturing process is highly energy intensive (approximately 4MWH/tonne). As SA’s electricity supply and price is a challenge which is unlikely to be overcome any time soon, it is to be expected that companies are shunning the idea of new refining capacity.  Another factor that Hobbs points out is that China has spare zinc smelter capacity currently and there is no shortage globally for smelter capacity which would also make it highly unlikely for new capacity to come on stream locally.  Vedanta Resources Plc bought Anglo’s local and Namibian zinc assets last year and Hobbs’s believes that the firm has a number of challenges to overcome before it considers a refinement investment in SA.  In addition, the deposits are remote which impacts on the cost of power supply and water needed for the manufacturing process. Lastly, the zinc concentrate from Gamsberg contains high levels of manganese which means that it would be necessary to mix the raw material with better quality concentrate, or that it would be necessary to build a customised plant that would require additional power requirements compared to that of a standard zinc refinery.  Exxaro stated that the company was not in a position to comment at this stage.

October 10, 2011 - The end that black-controlled JSE-listed Exxaro Resources will put to local zinc refining by December 31 is “clearly unfortunate”, says International Zinc Association of Southern Africa regional director Rob White.  The JSE-listed Exxaro put out a statement on Monday saying that its board of directors had confirmed that the production of zinc at the company’s Zincor refinery in Springs, Gauteng, would cease at year-end.  White comments to Mining Weekly Online that the market is in a state of flux, with many zinc traders and producers looking at opportunities to supply the South African market.  “It’s clearly unfortunate to have no local producer, and it’s unfair to say that there won’t be disturbances. There will be, but the small players shouldn’t have a problem and the larger players may look at global sourcing,” White adds.

South Africa will have to import its refined zinc in future, which will mean a foreign-exchange loss to the country.  Zincor is currently the only zinc refinery in South Africa. Most sales are to customers in the galvanising, zinc chemical and zinc alloy industries, clustered within a radius of 100 km of the plant.  Some 25% of Zincor’s total sales are to steelmaker ArcelorMittal South Africa.  The sulphuric acid produced at the plant is a significant source of supply to the South African market.

Exxaro executive Trevor Arran estimates to Mining Weekly Online that a third of the refinery’s 796 employees may not be able to be placed in alternative employment elsewhere within the diversified Exxaro mining group.  At current prices, it may make business sense to reclaim the gold, zinc, silver, lead, copper and cobalt on site at Zincor, a former gold and uranium plant.  “It’s actually a massive slimes dam,” Arran explains to Mining Weekly Online.

White says that the LSE-listed Vedanta, which bought the Gamsberg zinc operation from Anglo American, may decide to build a state-of-the-art 400 000 t/y zinc refinery in South Africa in the future, the location of which would depend on issues including power.  “There should be a reasonable amount of competition which should result in at least a capping of any excess increase in premiums for the South African market,” White says.  He does not foresee a zinc shortage and he expects strategic alliances to be formed.  “We’ve been quite active in trying to advise users about alternative sources of supply. All the large zinc players have either been to South Africa or are currently wondering around South Africa speaking to customers,” White adds.

The Scorpion zinc refined in Nambia does not come into the South African market in terms of an agreement that the exports will be outside of the Southern African Development Community.  But there is a possibility for a concession and there are currently discussions with the Nambian government to allow a certain amount of zinc metal to be sold in the South African market.  “That should occur sooner rather than later,” White says.

Located 50 km east of Johannesburg in Springs, the Zincor electrolytic zinc refinery has a capacity to produce 110 000 t/y of zinc and 170 000 t/y of sulphuric acid.  Vedanta, a FTSE 100 metals and mining company, produces zinc, lead, aluminium, copper and iron ore.  Monday’s Exxaro announcement follows one in July that it was planning to cease zinc production and was contemplating retrenchments in the base metals division.  A 60-day consultation period with labour unions, in accordance with labour legislation has now been completed, and the ramp-down of the operation to a mothballed state has started.  “We are taking all feasible steps to provide the most suitable options to affected employees, customers and suppliers,” says Exxaro CEO Sipho Nkosi.  “For employees this includes fair retrenchment packages, training courses to acquire new skills, and affected Zincor employees being preferentially considered for vacancies in the group.”  Plans are in place to meet supply agreements.  The move is part of Exxaro's strategic plan to divest from its zinc assets.  The decision to cease production has been made in the context of the difficult conditions of the zinc market, including its cyclical nature, low margins as well as the impact of higher electricity prices and the exchange rate.  Exxaro’s current portfolio of zinc assets includes the Zincor refinery, a 50.04% interest in the Rosh Pinah zinc and lead mine, a 26% interest in Black Mountain zinc and lead mine and the Gamsberg zinc project, as well as an effective 22% interest in the Chifeng zinc smelter in China.  The sale of Exxaro’s shareholding in Rosh Pinah and Chifeng is ongoing and Exxaro is in discussions with interested parties.  The International Zinc Association of Southern Africa is the southern Africa arm of the International Zinc Association, the membership of which includes 65% of the global zinc mining industry and 75% of the zinc refining industry.

September 9, 2009 - Safety managers were assessing the aftermath of a blast at Exxaro's Zincorp plant in Springs on Thursday morning, which killed three people, the company said.  The blast at the electrolyte zinc refinery, which produces zinc and sulphuric acid, left at least five people injured, according to emergency services on the scene.  "Preliminary information shows that an explosion occurred in the plant," a statement from the company said.  "The scene of the accident has been immediately secured and Exxaro operations and safety management are assessing the situation."  The company extended condolences to family, colleagues and friends of the deceased.  Earlier, Ekurhuleni emergency services spokesperson Roggers Mamaila said they received a request for help, initially for a fire, and when they arrived they found there had been an explosion that they were told was related to Argon gas.  Netcare 911 spokesperson Nick Dollman said they were told people had been attending their morning meeting when a sudden blast occurred and some people were thrown outside the building.  Three people died on the scene as a result of shrapnel and the force of the blast, he said.  There was no fire.