South African ferrochrome, chrome ore sectors at crucial juncture, says Merafe

This audio is brought to you by Astec Industries, a Global Leader in manufacturing equipment for infrastructure, including asphalt production, construction, and material processing, driving innovation and sustainability. The South African ferrochrome and chrome ore sectors are at a crucial juncture, the Johannesburg Stock Exchange-listed Merafe Resources reported on Tuesday, August 12. Sustained pressure from the prolonged economic downturn in the global ferrochrome market has led to a significant profit decline of R233-million for the six months ended June 30, Merafe stated in a media release to Mining Weekly. In the half year to the end of June, ferrochrome sales fell by 55% to 76 000 t and chrome sales by 14% to 217 000 t but platinum group metals sales were 9% up at 7 112 oz. The challenges, such as high energy costs and increased competition from China faced by the ferrochrome industry in South Africa, have led to the suspension of several of the Glencore-Merafe Chrome Venture Group's smelting operations in this year's second quarter from the beginning of April to the end of June. Additionally, there was reduced demand for chrome ore units in the first half of 2025. 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 Merafe's ferrochrome business in the medium to long term. The empowered company's chrome business will need to adapt to potential shifts in domestic demand, while continuing to monitor the significant influence of the Chinese market. Both sectors of the business will benefit from further stability in energy supply and the effective implementation of proposed regulatory changes. The Glencore-Merafe Chrome Venture will continue to engage with key stakeholders towards finding sustainable solutions, particularly for the smelting business. A cautious approach has been adopted to the remaining six months of the financial year when the focus will remain on efficient operations, cash preservation, cost control and efficient capital allocation. The board of directors of Merafe declared an interim gross cash dividend of 4c a share compared with the 20c a share of the corresponding period of last year.