MERAFE Resources is a far more profitable chrome ore miner than producer of ferrochrome based on its interim trading statement published on the JSE Stock Exchange News Service.
Merafe said in trading statement on Monday that headline share earnings for the six months ended June 30 will be between 55% and 75% higher year-on-year, coming in between 19.5 South African cents and 22c/share.
This is despite producing almost no ferochrome (about 28,000 tons, or 75% less than last year) in the period. However, chrome tons at 425t for the six months were only slightly lower than last year’s 443t.
Commenting on the expected increase in earnings, Merafe said they were “primarily driven by higher commodity prices and higher volumes sold over the period”. There may have been significant release from surface stocks, but that will only become apparent in Merafe’s interim numbers, scheduled for August 11, or when its partner in the Merafe-Glencore Chrome Venture reports its numbers next week.
In the meantime, the benefits of chrome ore mining are for all to see if only because mining companies with any exposure are rolling out expansions.
Northam Platinum increased chrome output 49.5% to 308,831 tons from its Eland mine, taking group production 17% in its 2026 financial year. Sibanye-Stillwater has targeted 4.5 million tons in chrome production by the turn of the decade – a doubling.
Speaking at the Junior Indaba in June, CEO of Glencore’s South African ferroalloys business, Japie Fullard, commented: “People sometimes ask me why we do not just close down all the smelters and export ore, because we would make more money. I can tell you that is true.”
That was based, however, on an electricity price from Eskom, the state-owned utility, of 87 cents per kilowatt hour. Since then, the parties have agreed a new rate of 62c/kWh which may be a vast improvement, although Fullard has been keen to play the benefits down. “He is not incentivised to say he’s making lots of money,” one analyst observed.
In any event, the Merafe-Glencore Chrome Venture will no doubt spell out how it expects to bring ferrochrome production back on line in the remainder of the financial year and into 2027. The new rate has saved jobs, hundreds of them – according to Fullard – and ensured stability for the thousands who rely economically on ferrochrome production. That may justify the margin cut as Merafe returns to ferrochrome.
