Merafe Resources posts profit plunge as soaring power costs shut smelters

Reuters | March 9, 2026 | 6:48 am Markets Africa Chrome

Glencore-Merafe Chrome Venture expected to benefit from energy deregulation in South Africa_1

Glencore Magareng chrome mine South Africa (Image courtesy of Glencore).

South Africa’s Merafe Resources reported a 72% slide in full-year profit on Monday, after suspending operations at its ferrochrome smelters due to high electricity costs.

Merafe’s headline earnings per share fell to 12.2 South African cents in the year ended December 31, 2025, from 42.9 South African cents previously.

The company, which operates a ferrochrome joint venture with Glencore, idled its plants in April 2025 citing soaring power costs and increased competition from Chinese smelters.

As a result, ferrochrome output from the Glencore-Merafe joint venture fell 63% to 112,000 metric tons in fiscal 2025. Production costs rose 14% during the year, mainly due to lower output.

South African smelters are struggling to compete with Chinese rivals amid power tariffs that have surged more than 900% since 2008, putting thousands of jobs at risk.

Glencore plans job cuts at South African ferrochrome and vanadium operations

In January, South Africa’s energy regulator approved a 35% reduction in electricity tariffs for Merafe and fellow producer Samancor, allowing Merafe to restart its largest plant, the Lion smelter, last month.

On February 27, state power utility Eskom offered a further 29% tariff cut to the distressed smelters, pending regulatory approval.

(By Nelson Banya; Editing by Sumana Nandy and Tom Hogue)