Merafe-Glencore project shines

MERAFE Resources, a junior partner in a chrome and ferrochrome joint venture with Glencore, increased interim output 16% to 195,000 tonnes.

MERAFE Resources, a junior partner in a chrome and ferrochrome joint venture with Glencore, increased interim output by 16% to 195,000 tonnes.

The higher production was a result of the completion of Project Lion II near Steelpoort in Limpopo and an absence of strikes in the six months to endJune. Community protests around Steelpoort last month had a “negligible” effect on the operations nearby.

Merafe has a 20.5% stake in the joint venture, which has capacity to produce 2.3-million tonnes a year of ferrochrome, a crucial ingredient in the production of stainless steel.

Some analysts have questioned the need to keep Merafe as the venture’s empowerment partner after Glencore bought Royal Bafokeng Holdings’ entire 28.68% in Merafe in the first half of the year, effectively diminishing the empowerment component Merafe brought with it.

They argue that if Glencore needed empowerment it would make better sense to set it up directly at asset level.

Global stainless steel output in the first six months of the year fell 2% year on year to 21-million tonnes, with Chinese production declining by nearly 1% to 10.8million tonnes. European and Japanese stainless steel output also fell.

Global ferrochrome demand slipped 0.8% in the first half of the year to 5.8-million tonnes, but South African ferrochrome supplies to China increased by 40% to 1.03-million tonnes.

Chinese ferrochrome production fell 12.4% in the period.

The sales secured SA’s position as the world’s top ferrochrome supplier, generating 35% of the globe’s ferrochrome, ahead of China’s 33%.