Merafe Resources reports R233 million profit decline amid global ferrochrome market downturn

Merafe Resources said Tuesday that the prolonged economic downturn in the global ferrochrome market had led to a significant R233 million profit decline for the six months ended June 30.

Challenges such as high energy costs and increased competition from China that were faced by the ferrochrome industry in South Africa have led to the suspension of several of the group's smelting operations in the second quarter of 2025.

There was reduced demand for chrome ore units in the first half.

An interim cash dividend of 4 cents is substantially lower than the 20 cents a share declared at the same time last year. Headline earnings per share fell 55% to 12.6 cents.

Ferrochrome production has increased by 27% to 112kt, compared with 154kt by the end of June 2023.

Revenue fell 47% to R2.52bn. Ferrochrome sales volumes were lower by 55% to 76kt. Chrome ore sales volumes fell 14% to 217kt. PGM sales volumes were up 9% to 7 112 ounces.

The CEO said the South African ferrochrome and chrome ore sectors were at a crucial juncture.

“While challenges related to energy supply and global competition persist, the recent proactive measures by the South African government to support the ferrochrome industry through policy interventions and incentivising beneficiation present a cautiously optimistic outlook, particularly for our ferrochrome business in the medium to long term.”

Our chrome business will need to adapt to potential shifts in domestic demand while continuing to monitor the significant influence of the Chinese market.

“The Glencore-Merafe Chrome Venture will continue to engage with key stakeholders towards finding sustainable solutions particularly for our smelting business,” they said.

“We remain cautious in our approach to the remaining six months of the financial year and will continue to focus on efficient operations, cash preservation, cost control, and efficient capital allocation,” they said.

BUSINESS REPORT