South African mining company Merafe Resources recorded a 64% increase in first-half profits, driven by higher chromium ore prices and sales volumes that helped offset a sharp decline in ferrochrome production.
According to Reuters, results presented by the company on Tuesday, 11 August, show that profit attributable to shareholders reached $31.98 million in the six months ended 30 June, compared with $19.4 million in the same period a year earlier.
Revenue from chromium ore rose 78% to $11.2 million, underpinned by a 75% increase in sales volumes relative to the first half of 2024. The price of chromium ore increased 11% over the period.
By contrast, ferrochrome production attributable to the company under its joint venture with Glencore fell 75% to 28,000 tonnes in the first six months of the year.
The decline was driven primarily by the suspension of production at the Wonderkop and Boshoek smelters, as well as a partial suspension of operations at the Lion smelter.
In June, Merafe announced plans to resume operations at the Wonderkop and Boshoek facilities after South Africa’s energy regulator, Nersa, approved a reduced electricity tariff for distressed ferrochrome producers. The Lion unit had already resumed operations in February.
Ferrochrome, an alloy of iron and chromium used primarily in the production of stainless steel, is manufactured in smelters that require large quantities of energy.
Merafe cautioned that the outlook for ferrochrome in the second half of the year remains unfavourable, citing the risk of oversupply driven by rising production in China and weak global demand for stainless steel.
South Africa, the world’s largest producer of chromium ore, has lost its leading position in processing the ore into ferrochrome to China, largely as a result of elevated electricity costs.
In response, the South African government intervened with a 54% reduction in the electricity tariff applicable to the sector in an attempt to prevent further smelter closures, after dozens of facilities had suspended operations.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=529286
