Merafe Resources Considers Suspension of Ferro-Chrome Furnaces Amid Weak Market Conditions

Merafe Resources

Prolonged Downturn in Ferro-Chrome Prices Forces Merafe to Reassess Operations

Merafe Resources, a South African mining company, is considering the suspension of some of its ferro-chrome furnaces due to continued market challenges. The company, which partners with Glencore in a ferro-chrome joint venture, has been severely impacted by weak ferro-chrome prices and low demand.

Weak Ferro-Chrome Prices Prompt Operational Review

In response to ferro-chrome prices hitting a four-year low, Merafe Resources has initiated a review of its smelting operations. This review aims to find ways to sustain profits amid ongoing market difficulties. If no viable solutions are identified, the company may suspend some of its furnaces in May, leading to a significant reduction in its ferro-chrome production.

Impact on Ferro-Chrome Production and Market Outlook

The joint venture produced approximately 301,000 tons of ferro-chrome in 2024. However, despite potential furnace suspensions, it is unlikely that this move will immediately boost ferro-chrome prices. Demand from the stainless steel industry, which is a major consumer of ferro-chrome, remains sluggish, and market conditions continue to struggle.

Merafe's decision highlights the broader challenges faced by the ferro-chrome industry, as it contends with low prices and weak demand, leaving many producers with tough choices.

Sibanye-Stillwater and Glencore-Merafe Expand Chrome Partnership to Boost South African Output

Merafe Resources

New agreement strengthens chrome recovery and output efficiency amid weaker PGM and ferro-chrome markets

Chrome Deal Expansion Aims to Optimize South African Production

Sibanye-Stillwater has expanded its chrome delivery agreement with Glencore-Merafe, targeting increased chrome production from its South African operations. The updated agreement builds upon a 2011 contract originally formed with Lonmin, which Sibanye-Stillwater acquired in 2019. Glencore-Merafe, a joint venture between Glencore and Merafe Resources, will now take over operational control of most of Sibanye-Stillwater's chrome recovery plants (CRPs).

The deal is designed to accelerate chrome deliveries while increasing overall production volumes. Chrome ore, a by-product of platinum group metals (PGM) mining, is playing a larger role in producer revenues due to declining PGM prices. The new arrangement aims to improve plant feed, enhance recovery, and lower operating costs across Sibanye-Stillwater’s CRP network.

Ferro-Chrome Pressures Prompt Strategic Collaboration

Merafe Resources reported 301,000 tonnes of ferro-chrome output in 2024 but faces pricing challenges in the current market. As part of a strategic review announced in February, Merafe may close selected furnaces due to sustained low ferro-chrome prices. This chrome partnership with Sibanye-Stillwater presents an opportunity to mitigate margin pressure through operational efficiency and increased recovery of chrome by-product material.

The chrome produced from Sibanye-Stillwater’s PGM operations feeds directly into Glencore-Merafe’s ferro-chrome value chain, making the partnership critical for long-term supply reliability. Enhanced chrome recovery is expected to bring economic benefits to both parties and reduce resource waste.

As global stainless steel demand evolves, chrome and ferro-chrome remain vital to the supply chain. The success of this partnership may influence similar strategies across the Southern African region, where PGM and chrome operations are closely intertwined.

Merafe to close two South Africa ferro-chrome smelters after tariff talks stall

Merafe Resources

Merafe to close two South Africa ferro-chrome smelters after talks with the government failed to deliver relief. Merafe Resources will place the Wonderkop and Boshoek smelters on care and maintenance. Merafe to close two South Africa ferro-chrome smelters because power costs and weak demand crushed competitiveness. Therefore, the decision raises fresh concerns about jobs and industrial capacity.

Glencore runs the assets through a joint venture with Merafe. The venture suspended operations at Wonderkop and Boshoek in May after a February competitiveness review. Meanwhile, low ferro-chrome prices and soft demand reduced margins. As a result, high electricity tariffs became the dominant constraint.

Electricity tariff disputes drive shutdown risk and potential job cuts

South Africa introduced a tariff realignment programme in October 2024. Cyril Ramaphosa announced the programme to ease pressure on industrial users. However, Merafe said tariff talks produced no agreement on its most urgent need. Therefore, Merafe to close two South Africa ferro-chrome smelters while it continues discussions.

The venture warned that job cuts could follow within weeks. It expects further government feedback but needs immediate clarity. Meanwhile, labour outcomes will depend on whether tariffs change quickly. As a result, the smelter closure timeline is now a political and economic flashpoint.

ferro-chrome

Chinese competition and weak European steel demand squeeze ferro-chrome margins

Merafe cited a structural squeeze across the value chain. Cheap Chinese ferro-chrome and high local power costs undermine South African production. Meanwhile, weak demand from the European steel industry reduces pricing support. Therefore, profitability has deteriorated across multiple plants.

The company produced 110,000 tonnes of ferro-chrome in the third quarter. That output fell 51% year on year. The new shutdowns follow earlier closures at Lydenburg in 2020 and Rustenburg in 2024. As a result, Merafe to close two South Africa ferro-chrome smelters as part of a multi-year contraction.

The 720,000 t/yr Lion smelter will remain the only operational plant owned by the venture. Operations at Lion paused in June for scheduled maintenance. It is expected to restart, but the venture has not confirmed the restart date. Therefore, near-term supply will hinge on Lion’s restart timing and power cost stability.

The Metalnomist Commentary

Ferro-chrome smelters live or die on electricity pricing and uptime. Meanwhile, repeated closures risk eroding skills and maintenance integrity across the fleet. Therefore, South Africa must align tariff policy with export competitiveness or accept further capacity loss.

Sibanye-Stillwater and Glencore Expand Chrome Recovery Partnership in South Africa

Sibanye-Stillwater

Agreement Targets Higher Chrome Output and Lower Costs as PGM Prices Slide

Sibanye-Stillwater has expanded its chrome delivery and production partnership with Glencore-Merafe, aiming to boost chrome recovery at its South African operations. The agreement, announced by Merafe Resources, builds on a prior 2011 deal initially struck with Lonmin, which Sibanye acquired in 2019.

Under the updated terms, Glencore-Merafe—a joint venture between Glencore and Merafe Resources—will take over operational control of most of Sibanye-Stillwater's chrome recovery plants (CRPs). This move is expected to streamline chrome recovery processes, increase feed rates, and improve yield efficiency while lowering operational costs.

Chrome Gains Importance as PGM Prices Fall

Chrome ore, a by-product of platinum group metal (PGM) mining, has become increasingly vital to PGM producers amid declining PGM prices. With this partnership, Sibanye-Stillwater aims to strengthen its revenue base by enhancing chrome output.

The updated deal will accelerate deliveries under the original contract and support expanded production. As PGM margins narrow, chrome has emerged as a key contributor to sustaining profitability across Sibanye-Stillwater’s mining portfolio.

Ferro-Chrome Market Pressure Triggers Strategic Review

Despite the focus on growth, Merafe is currently reviewing its ferro-chrome smelting operations due to weak global prices. The firm, which produced 301,000 tonnes of ferro-chrome in 2024, may close certain furnaces to adapt to the challenging market conditions.

Nevertheless, this expanded agreement positions Glencore-Merafe and Sibanye-Stillwater to maximize the value of existing chrome resources. It reflects a broader strategy among miners to diversify revenue streams and reduce exposure to volatile PGM markets.

Glencore-Merafe Ferro-Chrome Retrenchments Delayed as Energy Talks Continue

Merafe

Glencore-Merafe ferro-chrome retrenchments were delayed until 9 April as the joint venture continued discussions with Eskom and the South African government over energy pricing. The extension gives South Africa’s ferro-chrome sector another brief window to seek relief from high power costs.

The Glencore-Merafe ferro-chrome retrenchments had already been extended from 31 March before the latest delay. Merafe Resources, the junior partner in the joint venture with Glencore, said the new extension came at Eskom’s request.

The decision highlights the severe pressure on South African ferro-chrome smelters. Low ferro-chrome prices, high electricity costs and competition from lower-cost Chinese producers have made domestic smelting increasingly difficult to sustain.

Energy Costs Continue to Undermine Ferro-Chrome Smelting

South African ferro-chrome producers are struggling because smelting is highly power-intensive. Even after energy regulator Nersa approved a lower Eskom tariff, producers still viewed the relief as insufficient to restore competitiveness.

The tariff reduction was designed to support South Africa’s beneficiation sector, which converts chrome ore into higher-value ferro-chrome. However, the market signal remains weak because selling chrome ore has become more profitable than smelting it domestically.

This is a major industrial policy problem. South Africa holds major chrome resources, but high power costs are pushing the value chain away from local processing and toward raw material exports.

China Competition Deepens Pressure on South African Beneficiation

The Glencore-Merafe ferro-chrome retrenchments reflect a wider structural challenge in the global ferro-chrome market. Chinese producers continue to benefit from lower-cost processing conditions, while South African smelters face expensive electricity and weaker margins.

South African ferro-chrome production dropped sharply in 2025 as low prices and high energy costs forced capacity reductions. Samancor, the country’s other major ferro-chrome producer, has already proceeded with retrenchments despite the lower tariff.

The extended deadline does not remove the underlying risk. Unless energy pricing becomes more competitive, South Africa may continue losing ferro-chrome smelting capacity, weakening domestic beneficiation and reducing industrial value capture from its chrome ore base.

The Metalnomist Commentary

The Glencore-Merafe delay shows that South Africa’s ferro-chrome crisis is now an electricity competitiveness crisis. Without a durable power solution, the country risks exporting more chrome ore while losing the smelting capacity that once anchored its beneficiation strategy.

Merafe Temporarily Suspends Lion Ferro-Chrome Smelter

Merafe Resources

Maintenance Shutdown Amid Weak Market Conditions

Merafe Resources has suspended operations at its Lion ferro-chrome smelter in South Africa for scheduled maintenance and planned rebuilds. The facility has a nameplate capacity of 720,000 metric tonnes per year, making it one of the largest in the region. The temporary suspension underscores both operational requirements and broader market headwinds affecting the ferro-chrome sector.

The company, which operates the smelter as part of a joint venture with Switzerland-based Glencore, has already halted production at its Boshoek and Wonderkop smelters earlier this year. Boshoek was idled on 1 May, followed by Wonderkop on 31 May, both due to difficult market conditions and weaker demand.

South African Ferro-Chrome Industry Under Pressure

The joint venture’s ongoing capacity reductions reflect sustained challenges across the South African ferro-chrome industry. The Lydenburg smelter was permanently closed in 2020, while the Rustenburg smelter was placed under care and maintenance in 2024. These moves highlight the structural oversupply, rising energy costs, and weaker stainless steel demand weighing on the ferro-chrome market.

As a result, producers face mounting pressure to balance production efficiency with profitability. Maintenance schedules, cost discipline, and potential future restarts will likely depend on global ferro-chrome price recovery and improvements in stainless steel demand, particularly from China.

The Metalnomist Commentary

Merafe’s latest suspension highlights the fragility of South Africa’s ferro-chrome industry, where high energy costs and market volatility remain persistent risks. With multiple smelters idled or closed, supply-side discipline may support future price stabilization, but global demand recovery will be essential for sustainable operations.

S. African Merafe’s FeCr Production Down in 1H

South African mining company Merafe Resources reported a decline in ferro-chrome production for the first half of this year, attributed to the idling of the Rustenburg smelter.

The Glencore-Merafe Chrome Venture produced 154,000 tons of ferro-chrome in the six months ending on June 30, marking a 17% decrease from the same period in 2023.

The company stated that the reduction in production was due to the Rustenburg smelter being non-operational this year, having been suspended because of "prevailing market conditions."

In the results for venture partner Glencore for the first six months of the year, the company noted that the Rustenburg smelter would remain shut "pending an improved price/cost environment."

Samancor Reduces Charge Chrome Benchmark for Fourth Quarter

Samancor

Samchrome FZE, the distributor for South African ferrochrome producer Samancor, has announced a reduction in its reference price for charge chrome in Europe for the fourth quarter of 2024. The new price, set at $1.46/lb, marks a 4% decrease from the previous quarter’s benchmark of $1.52/lb.

Samchrome's reference price replaces the European Benchmark Ferrochrome Price (EUBM), a former industry standard for South African charge chrome with a minimum chrome content of 52%. The EUBM was discontinued in June 2024 due to pressure from European competition regulators and criticism from market participants, who believed it was disconnected from the spot prices of higher-grade ferrochrome.

The EUBM, once negotiated by South Africa's Merafe Resources and Glencore in partnership with a European stainless steelmaker, was abandoned in May 2024. Following the discontinuation, many buyers and sellers continued to use the final Glencore-Merafe price of $1.52/lb. Samancor initially adopted this price for its reference point in July.

Despite Samancor’s new reference price, multiple spot transactions have been reported below the $1.46/lb mark. Traders and end-users are expressing concerns that the new reference price, like the EUBM, may not reflect true market conditions. As a result, many market participants are turning towards alternative pricing mechanisms, such as index-based systems offered by price reporting agencies, to replace the outdated EUBM.

The Move Towards Pricing Reform

In both the European and North American markets, the search for a more accurate pricing system is ongoing. The limitations of the EUBM and concerns over the accuracy of the current reference price highlight the need for a more transparent and market-reflective approach. The future of charge chrome pricing may lie in the adoption of these newer, index-driven mechanisms.

Samancor Establishes New Charge Chrome Pricing Standard for 3rd Quarter

Samchrome FZE, the Dubai-based distributor for South African ferro-chrome producer Samancor, announced on Sunday its decision to introduce an independent reference price for charge chrome shipments to Europe in the third quarter of 2024. This decision follows the recent discontinuation of the longstanding European Benchmark Ferrochome Price (EUBM).

Setting the price at $1.52 per pound, Samchrome FZE aims to fill the void left by the EUBM, which historically set the industry standard for South African charge chrome containing a minimum of 52% chrome, crucial for global benchmarks in the stainless steel sector.

Previously negotiated by South African producer Merafe Resources in collaboration with Glencore, the discontinuation of the EUBM prompted rapid adjustments across European, North American, and Asian markets. Many stakeholders agreed to extend the final Glencore-Merafe benchmark of $1.52/lb into the third quarter, aligning with Samancor's newly established pricing framework.

While Samancor previously played a role in negotiating the EUBM, recent developments indicate a shift in strategy, with the company now asserting its own pricing model. Discussions have also surfaced regarding the adoption of alternative pricing mechanisms leveraging indexes from reputable price reporting agencies, highlighting broader industry trends toward diversification and transparency.

As market participants navigate these changes, varying perspectives emerge on the viability of direct EUBM replacements, given concerns over regulatory scrutiny and the evolving dynamics of ferro-chrome spot pricing.

Samancor Adjusts Charge Chrome Pricing Strategy Amid Market Shifts

Samchrome

Samchrome FZE, the Dubai-based distributor for South African ferro-chrome producer Samancor, has announced a reduction in its reference price for charge chrome for the first quarter of 2025. This strategic price adjustment reflects evolving market dynamics following the discontinuation of the European Benchmark Ferrochrome Price (EUBM).

Price Adjustment Details

The new reference price for charge chrome will be $1.35 per pound, marking a 7.5 percent decrease from the current rate of $1.46 per pound. This decision comes in response to the need for a new pricing benchmark after the EUBM, which had served as the industry standard for South African charge chrome with a minimum of 52 percent chrome content sold to Europe, was phased out in June of the previous year.

Market Implications of EUBM Discontinuation

Previously negotiated by Merafe Resources in conjunction with mining giant Glencore and a major European stainless steelmaker, the EUBM had been a global reference point for the charge chrome industry, influencing pricing decisions in Asia and North America as well. Its discontinuation in June 2024 has led to a more fragmented pricing landscape across major global markets, compelling distributors and producers like Samchrome to establish independent pricing strategies to remain competitive.

This shift underscores the broader industry trend towards regionalization and customization of pricing mechanisms in response to local market conditions, rather than relying on a single global benchmark.

Menar Manganese Alloy Restart Signals Revival of South Africa’s Ferro-Alloy Industry

Menar

Menar plans furnace restart at Metalloys smelter

Menar will restart operations at the Metalloys manganese alloy smelter in South Africa within the next two to three years. The smelter, previously owned by Samancor and idle since 2020, was acquired by Khwelamet in June 2024. Khwelamet is jointly owned by Menar Capital and Ntiso Investment Holdings and expects to process on-site slag for early sales. As a result, the company plans to resume metal output within a year, with full furnace restarts to follow.

Menar selected the site due to its strong infrastructure links, including rail and power access. The smelter is directly connected to ore sources in the Northern Cape via dedicated railway lines.

Manganese market recovery expected to support beneficiation push

Menar believes manganese alloy prices will rebound as steel demand grows, supporting smelter restart economics. Prices dipped in 2023, but the company remains confident that medium-term demand will justify restarting production. “Prices are far from peak levels, but recovery will come with economic growth,” said Menar CEO Vuslat Bayoglu.

South Africa holds the world’s largest chrome and manganese reserves, yet domestic beneficiation remains underdeveloped. High power prices and poor grid reliability continue to pressure the country’s metals industry. For instance, Merafe Resources recently warned it may shut down most of its ferro-chrome capacity due to high costs.

The Metalnomist Commentary

Menar’s bold move to restart Metalloys could mark a turning point for South Africa’s stagnant ferro-alloys sector. With infrastructure already in place and long-term ore access secured, success will now hinge on electricity stability and pricing reform. As global steel demand returns, this restart could help re-anchor South Africa in the global manganese value chain.