There seems to be a bit of confusion between the relationship of the composition of “chrome ores” (i.e. Cr2O3 % and Cr:Fe ratios, etc) and their prices. To understand the connection, one has to understand the connection between the range of end products, their markets and the economics of the production of them.

First order of business is to understand the “assays”. The general formula for the mineralogical family of spinels is (Fe, Mg, Mn)(Cr, Al)2O4 . Strictly speaking, the pure end-member, FeCr2O4, is called chromite and consists of 32% Fe and 68% Cr. Elements within the brackets of the formula can more or less freely substitute for each other, creating a wide range of compositions of naturally occurring spinels. However, geologists use the term “chromite” in a wider sense, referring to “chrome-rich or chrome-bearing” spinels. Thus, the Cr2O3 assay of a sample of rock, reflects the wt % of the chrome-bearing spinel in the sample. If for example, the individual chrome spinel grains in a sample uniformly contain 51% Cr2O3, then the maximum assay of the sample can only be 51% Cr2O3 and that will occur if the sample is 100% chrome spinel. If the sample assays 40% Cr2O3, then the % chrome bearing spinel in the sample is proportionately less. In the trade the term “chrome ore” is used to refer to any rock containing a relatively high proportion of chrome spinel. Grades reflect varying proportions and/or compositions of chrome spinels. The term “massive” chromite is a bit of a misnomer. It is a term used by geologists to approximate/describe what they perceive visually and it doesn’t always mean 100% chromite. In addition, the composition of the chrome spinel can vary within an individual deposit, reflecting primary and/or secondary alteration processes.

Chrome ore is used to produce a variety of end products: ferrochrome, an Fe-Cr alloy (metallurgical), chemical, foundry sands and refractory products. The bulk of chrome ore (>90%) mined is used in the production of ferrochrome, which can be produced by a variety of proprietary processes. What is common to each process, is that the chrome ore is reacted with a reductant in a carbothermic reaction, in a smelter to produce ferrochrome. The compostion of the ferrochrome is more or less determined by the original composition of the chrome ore (i.e. %Cr2O3 and its Cr:Fe ratio). Different grades of ferrochrome are thus produced by different producers.

Ferrochrome is a critical ingredient in the production of steel. There is no known substitute for Cr in steel which can, in part, impart the physical characteristics demanded by the market for different types of steel. Ni and/or Mo contents are also critical components to consider. The Cr composition of different grades of steel is defined by international standards, as is the maximum amount of trace impurities such as sulphur, silicon and phosphorus to name a few. Like the production of ferrochrome, the production of steel is carried out by a number of companies using somewhat proprietary technologies. These different technologies have been designed to produce specific types of steel and hence, are somewhat restricted as to the input of grades of ferrochrome to be used. In addition, the prices and availabilities of the grades of ferrochrome are a major consideration. In other words, the market for ferrochrome is very different than the market for base metals such as Ni and Cu. Ferrochrome producers can be fully vertically integrated (from miners to steel manufacturers-e.g. Outokumpu), partly integrated (miners too – e.g. Samancor, Xstrata) or because they produce a relatively small range of grades of products, can be closely tied to specific steel producers. In the case of the former, costs/prices are internal and in the latter case, prices are determined by private contracts. This is the major reason for the difficulty in relating grades of “chrome ore” to their prices. Although a particular chrome ore may meet Cr2O3 and Cr:Fe ratio specifications, the presence of deleterious amounts of say sulphides may dramatically lower its value in the market place. In other words, the more “out of spec” the chrome ore to a particular ferrochrome producer, the lower the price that consumer would be prepared to pay.

The major demand for chrome ore will continue to be for the production of ferrochrome. However, the demand for ferrochrome depends on three things: the demand for steel, the ability to substitute pig iron for ferrochrome and the amount of steel recycled.

I have attempted to provide a simplistic explanation to what is really a complicated market. I apologize if I have created more confusion.

Respectfully yours

geoprof