How to Sell Chrome Concentrate as a South African Producer

There is no shortage of buyers for South African chrome concentrate. There is a serious shortage of producer offers that a buyer can act on. If you are running a wash plant or holding a stockpile and your material is not moving, the problem is far more likely to be how it is being presented than the market itself.

Start with what your product actually is

A buyer needs four numbers before anything else: the Cr₂O₃ percentage, the chrome to iron ratio, the sizing and the moisture content. The first two determine what alloy a smelter can make from your material and therefore what it is worth to them. A great many producer offers lead with a grade and stop there, which tells the buyer that the seller has not tested properly or does not understand what is being sold.

If you do not have a current assay from a recognised laboratory, get one before you approach anybody. SGS and Intertek are the two names that will not be questioned. An in house plant assay is fine for your own process control but it will not open a conversation with a smelter, and offering one signals inexperience.

Know your honest tonnage

Two figures matter and they are not the same. What you have on the floor today, and what you can reliably produce per week or per month. Buyers care far more about the second than the first. A single 5,000 tonne stockpile is a one off transaction. A plant that can hold 1,000 tonnes a week every week is a relationship, and it is worth substantially more attention from a serious buyer.

Be conservative. A producer who commits to 2,500 tonnes a week and delivers 1,200 has not oversold once, they have damaged the relationship permanently. Quote what you can hit in a bad month, not what you managed in your best one.

Decide what you are actually selling

Ex works at the wash plant, delivered to an inland point, or free on board at a port are three completely different products with three different prices, and a producer who has not decided which one they are offering will get quoted against the worst case every time.

For most South African wash plant operators the honest answer is free on truck at the plant, and there is nothing wrong with that. Say so. A buyer who wants delivered material will arrange the leg or bring in somebody who can, and they will respect a seller who was clear about where their responsibility ends.

Get your title position straight

This is where a startling number of chrome offers fall apart. The person circulating the material is frequently not the person who owns it, and sometimes is three steps removed from anybody who does. If you are the producer, say so plainly and be ready to evidence it. If you are mandated by a producer, say that instead, and have the mandate document.

Ambiguity here is fatal. A buyer who cannot establish who they would be contracting with will stop responding rather than argue about it, and you will never learn why.

Do not broadcast your offer

The single most damaging thing a producer can do is send their material into open broker groups. Every forward adds an intermediary and a commission expectation. By the time it reaches an actual smelter it carries four or five layers, a price that no longer works, and a chain of title nobody can verify. The buyer ignores it, and your material is now burned with that buyer for months.

Take it to one counterparty at a time. Fewer conversations, better ones.

Expect a trial parcel, and welcome it

Almost no chrome relationship starts at full volume. The normal pattern is a trial of around 500 tonnes to prove the grade and the logistics, then a ramp, typically a thousand tonnes in the first week and two and a half thousand a week from the second, scaling toward a monthly target by agreement.

Producers sometimes read a trial request as a lack of commitment. It is the opposite. A buyer who structures a proper trial is a buyer who intends to build a running contract, and one who commits to 10,000 tonnes a month on a first conversation is usually not in a position to perform.

Insist on a premium schedule

If your material occasionally assays above the contracted base, you should be paid for that, and it should be written down in advance rather than negotiated when a truck is already loaded. A workable structure sets a fixed amount per tonne above 42.00% Cr₂O₃ and a further step above 43.00%, determined on the delivery assay.

Equally, if your material sometimes runs below spec, know what the penalty is before you sign. A contract that is silent on both is a contract that will be argued about.

And on payment

On a running supply agreement you cannot fund months of production out of working capital while waiting for a single settlement. The structure that works is an escrow you can draw against as you deliver, sized to a defined period of offtake and revolving as the buyer tops it up. A commonly used split releases the bulk against delivery documents and the balance once testing confirms the grade.

Be careful about accepting a bank guarantee or a standby instrument in place of that. Both look reassuring and neither gives you cash while you are producing.