Merafe increases its ferrochrome production to 384kt in 2022

In its Commentary on results, Merafe Resources say that 2022 has been characterised by a number of uncertainties. The Russia/Ukraine conflict contributed to the rise in global inflation and supply chain constraints. Cost pressures continue to mount, and this resulted in the Glencore-Merafe Pooling and Sharing Venture’s unit production costs rising by an unprecedented 30% year-on-year.

Despite the challenges, Merafe recorded profit after tax of R1 410 million driven by higher commodity prices and a weaker exchange rate.

The board of directors of Merafe (the “Board”) has declared a final cash dividend of R325 million bringing the total dividends for the year to R625 million (2021: R725 million).


  • 14% decrease in TRIFR (1) to 2.40 (2021: 2.80 (2))
  • 1% increase in ferrochrome production to 384kt (2021: 379kt)
  • 2% decrease in revenue to R7 939 million (2021: R8 063 million)
  • Increase in production cost per tonne by 30% (2021: 5% decrease)
  • 12% decrease in EBITDA (3) to R2 141 million (2021: R2 432 million)
  • Headline earnings per share of 56.4 cents (2021: 67.0 cents)
  • Basic earnings per share of 56.4 cents (2021: 66.8 cents)
  • Net cash generated from operating activities increased to R1 698 million (2021:R1 156 million)
  • Cash balance of R1 269 million (2021: R972 million)
  • Final cash dividend of 13 cents per share (2021: 22 cents per share)


Disruption and volatility have long characterised markets and the last two years were no exception. First there was COVID-19 which was followed by the Russia/Ukraine conflict. This led to inflationary concerns and contributed to supply chain challenges which were already prevalent in the aftermath of COVID-19 lockdown relaxations. Energy insecurity and global recession concerns now present risks that businesses and nations across the world have to deal with.

Given this operating environment, 2023 is likely to be a challenging year. There is expectation that global recession will affect commodity prices negatively. On the positive side, the reopening of China after their zero COVID-19 policy suggests that there might be compensating increased economic activity from that region. Forecast growth in stainless steel demand, underpinned by growth in Asia and Europe, is positive for the ferrochrome industry.

Merafe expects the efficiencies achieved in our operations to be sustained. Its production profile will be influenced by several factors including Eskom’s inability to meet the country’s electricity demand and rolling electricity outages as well as its stock holding levels. Its capital expenditure program will be focused on sustaining capital.

Overall, and once again, Merafe remains cautious in its approach to the future and will continue to focus on efficient operations, cash preservation, cost control and optimal capital allocation.

The Eastern Chrome Mines’ Platinum Group Metals plant and green energy initiatives are some of the important projects that will receive management’s attention in


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