Merafe suspends operations of two ferrochrome smelters

Merafe Resources Limited has confirmed that the operations of two smelters in South Africa – Boshoek and Wonderkop – will be suspended. The company said in a statement.

The decision was made following the completion of the business review process initiated by the company as part of its joint venture with Glencore in the chrome production and distribution (PSV) in response to current market challenges. The review was initiated in February.

The Boshoek smelter will cease operations on May 1 this year, and Wonderkop on May 31, so that the company can process the raw materials remaining in the PSV within a month.

It is noted that after the suspension of metallurgical operations at Boshoek and Wonderkop, both complexes will continue basic maintenance work.

“The suspensions will remain in effect indefinitely until any significant changes in the ferrochrome market,” the company said in a statement.

The Lion plant, which is also part of the joint venture, will continue to operate and produce ferrochrome until the end of this year.

According to Miningmx, the main reason for the suspension is the significant increase in electricity prices over the past 7-8 years. There has also been a surge in cheaper ferrochrome production in China, which has reduced the margins of global smelters.

As GMK Center reported earlier, global prices for ferroalloys fell in mid-April. Producers were forced to adjust supply amid weak demand despite rising costs.