Merafe announces rise in ferrochrome price for Q2-2022
SANDTON – Merafe Resources has advised that the European benchmark ferrochrome price for the second quarter of 2022 has been settled at 216 US cents per pound, a 20.0% increase from the first quarter of 2022.
Currently, Merafe’s revenue and operating income is primarily generated from the Glencore Merafe Chrome Venture (Venture) which is one of the global market leaders in ferrochrome production, with a total installed capacity of 2.3mt of ferrochrome per annum. Merafe shares in 20.5% of the earnings before interest, taxation, depreciation and amortisation (EBITDA) from the Venture.
Merafe and Glencore Operations South Africa Proprietary Limited (Glencore) formed the Venture in July 2004 when they pooled their chrome operations to create the largest ferrochrome producer in the world.
The aim of the Venture business model and strategy is to ensure that its ferrochrome interests are profitable and sustainable and it is achieve by:
- extracting chrome ore from the Venture’s mines and beneficiating it in our smelters in a safe and cost-efficient manner;
- investing in projects such as the Bokamoso and Tswelopele pelletising and sintering plants and the Lion ferrochrome plant Phases I and II that improve the energy and cost efficiency of the Venture’s ferrochrome operations;
- employing the Venture’s proprietary Premus technology to ensure that it is the lowest-cost producer of ferrochrome in South Africa and, despite rising energy costs in South Africa, remains in the lowest quartile of the global ferrochrome production cost curve;
- using the flexibility provided by the Venture’s variety of technologies to meet changing operating circumstances and customer requirements; and
- focusing on reducing costs at the operations and head office.
