THARISA declared force majeure on its contracted chrome concentrate sales agreements after shutting down its North West province chrome and platinum group metal (PGM) processing facilities in accordance with the 21-day national lockdown, effective today.
The lockdown was ordered by the South African government on March 23 in an effort to stem the spread of the COVID-19 virus. The country is currently scheduled to come out of the lockdown period on April 16.
The company said it had also received force majeure notifications from its PGM concentrate offtakers.
The lockdown, especially if it is extended, could add a bit more pressure to the South African chrome market which Tharisa said as early as last year could be due for a round of consolidation. “We have started to see a change in chrome production,” Tharisa COO, Michelle Taylor was quoted by BusinessLive to have said.
“Small plants have closed down and we see that production coming offline. Plants of small to medium size, we’ve seen them curtailing production and going on a longer break over Christmas and New Year,” she said.
Merafe Resources, one of the country’s largest chrome producers, reduced the total dividend following a full-year loss for its 2019 financial year.
“Industry dynamics led to market supply exceeding demand and resulted in lower realised CIF (including cost, insurance and freight) ferrochrome prices,” said Merafe CEO, Zanele Matlala in published comments to the results on March 9.
