Chrome venture reports ruinous decline in ferrochrome production

Merafe resorces’s attributable ferrochrome production from the Glencore Merafe Chrome Venture for the six months ended 30 June 2020 decreased by 42% compared to the prior comparative period.

The decrease is as a result of production cutbacks in response to COVID 19, market conditions and Eskom’s electricity curtailments to a limited extent.

Attributable ferrochrome production for Six months ended 30 June 2020 was 120 000 tonnes while it was 206 000 tonnes in the comparative period a year earlier.

Merafe is expecting to report a basic loss per share and headline loss per share of between 2.79 cents and 3.41 cents for the six months ended 30 June 2020, compared to a basic earnings per share and headline earnings per share of 6.6 cents for the prior comparative period.

The expected decrease in basic earnings and headline earnings per share is primarily driven by substantially lower chrome ore and ferrochrome prices and lower sales volumes which were partially offset by a weaker average Rand:US$ exchange rate.