South Africa's Chrometco files for business rescue, operations suspended
(Kitco News) - South African chrome and PGMs producer Chrometco announced today that the group has been under severe financial pressure due to the prevailing chrome commodity market price, the Covid-19 pandemic and the Adjusted Level 4 lockdown with limited access to external sources of funding.
The company said that over the last year, active and continuous efforts have been made to raise appropriate funding. This process is still ongoing, the company added, but the group has been dealt further blows with the introduction of the Adjusted Level 4 lockdown and by a DMRE suspension notice served at the mine, restricting the Sail Minerals (the controlling shareholder in Chrometco) Chrome Wash Plant operations to less than 60%.
The company noted that in light of the financial position in which Sail Contracting now finds itself, it has sought legal advice and has been advised that it has to apply for provisional liquidation because it is unable to meet its commitments to its creditors and employees.
The company added that as a consequence, the Mining and Chrome Wash Plant operations will be placed in care and maintenance and Sail Minerals will be applying for Business Rescue. The company said that it is hopeful that a restructuring and capital raising process has reasonable prospects of success, with a potential restart of its operations soon thereafter, although this is not guaranteed.