Merafe Resources sees 72% profit drop after halting operations

Merafe Resources reported a 72% slide in full-year profit after suspending operations at its ferrochrome smelters due to high electricity costs.

Image credit: Merafe Resources

Merafe's headline earnings per share fell to 12.2c in the year ended 31 December 2025, from 42.9c 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 tonnes in fiscal 2025.

Production costs rose 14% during the year, mainly due to lower output.

Eskom grants Samancor and Glencore 29% electricity price cut

27 Feb 2026

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.

In January, the National Energy Regulator of South Africa (Nersa) 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, power utility Eskom offered a further 29% tariff cut to the distressed smelters, pending regulatory approval.