Merafe mulls suspension of furnaces as ferrochrome market remains weak
JSE- and A2X-listed ferrochrome producer Merafe Resources has advised that it will review its ferrochrome smelting business and assess the potential measures through which ongoing market challenges can be addressed.
Merafe has a chrome pooling and sharing venture in place with Glencore Operations South Africa, in which Glencore holds a 79.5% share and Merafe the balance.
The Glencore-Merafe chrome venture operates five ferrochrome smelters, 22 ferrochrome furnaces and six chrome mines.
The venture produced 301 000 t of ferrochrome in the year ended December 31, 2024.
The business review follows sustained pressure from the prolonged economic downturn in the global ferrochrome market, with Merafe not foreseeing an easing of this pressure in the near to medium term.
Should the companies not be able to identify viable solutions to sustain profitability, the joint venture will begin to suspend some of its furnaces by May, thereby resulting in a significant reduction in Merafe’s ferrochrome production.
Merafe already had to start a Section 189 consultation process at its Rustenburg smelter complex, which includes the Boshoek and Wonderkop operations, last year. At these operations, furnaces have been idle since September 2023 as a result of weak market conditions. This while the Lydenburg smelter remains on care and maintenance.
The companies are working with regulatory authorities to mitigate any continued adverse impacts and will continue to explore all viable alternatives together with organised labour.
Merafe has also started engaging with its suppliers to identify cost-saving measures to help improve the current situation.
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