Rustenburg ferrochrome furnace 5 will resume operations in Q3 2021

Merafe Resources says the Lydenburg smelter remains on care and maintenance for the foreseeable future, however Rustenburg furnace 5 will resume operations in the third quarter of 2021.

Merafe’s attributable ferrochrome production from the Venture for the six months ended 30 June 2021 increased by 66% to 199kt (June 2020:120kt). The increase was a result of production in the current period being less impacted by COVID-19 restrictions, while improved plant efficiencies in all our smelters were achieved.

The total cost of production per tonne decreased by 11.4%. The decrease was mainly due to increased production volumes and lower chrome ore costs, which were somewhat offset by double digit increases in Eskom electricity tariffs and higher cost of reductants.

The National Energy Regulator approved tariff increases of 15.6% effective 1 April 2021. These increases continue to add to cost pressures on the Venture’s smelters and further reduce the cost competitiveness of the South African Ferrochrome industry.

Local procurement of reductants was challenging due to inadequate availability of coke and anthracite, which necessitated the Venture importing these reductants at a higher cost. The stronger ZAR against the US$ did assist to cushion the impact.

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