Merafe Resources: ferrochrome melting operations took strain in 2025
Merafe Resources’ Chief Executive Officer reported on results says that profits declined significantly to R143 million mainly due to lower ferrochrome sales and a stronger ZAR:USD exchange rate. Following the completion of the Business Review process in April 2025, production was suspended at all operating smelters of the Glencore-Merafe Chrome Venture’s (Venture).
The ferrochrome industry in South Africa continues to face significant structural challenges, including high energy costs and increased competition from Chinese producers.
Outlook
Smelting operations took strain in 2025. Overall and in the medium to long-term, the viability of these operations depends on decisive and deliberate action to materially lower energy costs for smelters as well as sustained improvement in global ferrochrome / steel demand and prices.
While the future of the smelting operations remains uncertain, the chrome ore business has done well in 2025, and the Venture will continue to invest in this part of business.
As in 2025, Merafe Resources expect both the chrome ore and the PGM businesses to contribute positively towards its financial performance in 2026. The company remains cautious in its approach to 2026 and will continue to focus on efficient operations, cash preservation, cost control and efficient capital allocation.
Merafe Resources 2025 financial year in review
– 31% decrease in revenue to R5 835 million (2024: R8 443 million)
– 72% decrease in headline earnings per share to 12.2 cents (2024: 42.9 cents)
– 79% decrease in basic earnings per share to 5.7 cents (2024: 26.7 cents)
– No change in the final cash dividend of 8 cents per share (2024: 8 cents per share)
– 3% decrease in net asset value to R4 719 million (2024: R4 876 million)
– 69% decrease in earnings before interest, taxation, depreciation and amortisation (EBITDA) to R533 million (2024: R1 698 million)
– 65% decrease in net cash generated from operating activities to R609 million (2024: R1 744 million)
– 19% decrease in cash and balances held with Central Treasury to R1 156 million (2024: R1 434 million)
– 63% decrease in ferrochrome production to 112kt (2024: 301kt)- 44% increase in chrome ore sales volumes to 683kt (2024: 475kt)
– 10% increase in Platinum Group Metals (PGM) sales volumes to 14 948oz (2024: 13 557oz)
– 14% increase in ferrochrome production cost per tonne (2024: 2%)
