[miningmx.com] – GLOBAL demand for ferrochrome was expected to improve, said BDLive citing comments from Merafe Resources which posted a 58% decline in taxed profit for the financial year ended December 31.
Ferrochrome, which is used in the manufacture of stainless steel and is closely linked to industrialisation in China, is expected to see a price rise in Merafe’s new financial year owing to supply cutbacks, BDLive said.
Merafe agreed with Eskom to shut five of its 20 furnaces in terms of an electricity buy-back agreement.
Commenting on the year under review, Merafe said the 58% plunge in after-tax profit was partly due to a depreciation of R140m in assets, and an impairment loss of R77.5m and R19.7m in net financing costs.
Headline earnings per share were little changed at 5c versus 6c in the previous financial year. The company reported attributable sales of 255‚000 tons of ferrochrome, which was similar to the previous year’s sales of 254‚000 tons.
Merafe also said the second phase of its R1bn “Lion” ferrochrome plant would be completed in the second half of this year.
“Once this plant is fully operational, additional consumption efficiency improvements and cost savings are expected to materialise,” the company said.
