Merafe may shut smelters from May as pressure mounts

MERAFE Resources has launched a review of its South African ferrochrome smelting business warning on Monday that furnaces could be mothballed by May unless solutions are found.

A business review of its ferrochrome smelting business will assess “potential measures to address the ongoing market challenges”, said Merafe. Merafe has a 20.5% stake in the Glencore-Merafe Chrome Venture.

The review follows sustained pressure from the prolonged economic downturn in the global ferrochrome market “which pressures are not expected to ease in the near to medium term”, the company said.

“Should the [venture] not be able to identify viable solutions to sustain profitability, it will begin to suspend certain of its ferrochrome furnaces in May 2025, thereby resulting in a significant reduction in Merafe’s ferrochrome production.”

The Glencore-Merafe venture’s operations consist of five ferrochrome smelting operations spanning the North-West and Limpopo provinces, said News24.

The venture had 6,719 employees as of the end of December 2023, with ferrochrome mainly used in the production of stainless steel. This industry had been under pressure in 2024 amid weaker demand from the world’s biggest consumer, China, the publication said.

The joint venture also has four mines and two platinum group metals plants.

Merafe said the venture is actively working with regulatory authorities to mitigate any continued adverse impacts and will continue to explore all viable alternatives in partnership with organised labour.

It has also engaged with its suppliers to identify cost-saving measures to help improve the current situation, it said.