Merafe profit more than doubles despite ferrochrome output falling 75%

Higher chrome ore volumes and firmer prices offset a sharp drop in smelted output during smelter downtime

11 August 20262 min read

Merafe profit more than doubles despite ferrochrome output falling 75%

Merafe Resources reported net profit of R512m for the six months to 30 June 2026, more than double the R233m earned a year earlier, even as ferrochrome production from its Glencore-Merafe joint venture fell 75% to 28,000 tonnes. Headline earnings per share rose 64% to 20.7 cents, revenue climbed 36% to R3.43bn, and EBITDA rose 60% to R774m.

Ore sales carry the results

The improved earnings were driven largely by chrome ore, with sales volumes up 75% to 380,000 tonnes even as ferrochrome sales volumes slipped 4% to 73,000 tonnes. "The increase in profits is supported by significantly higher chrome ore sales volumes and an improvement in commodity prices," chief executive Zanele Matlala said, highlighting how the venture's raw ore business had cushioned the blow from its smelters running well below capacity for much of the period.

Smelters still finding their feet

The ferrochrome output decline reflected the extended idling of the Boshoek and Wonderkop smelters for much of the first half, before their restart following Eskom's 62c/kWh tariff agreement in June 2026. The results captured a venture still in the early stages of recovering from more than a year of retrenchment threats and reduced smelting capacity, even as its underlying chrome ore business thrived on strong export demand.

A cautious outlook

Management flagged that ferrochrome margins could remain under pressure because of increased supply from China and the possibility of market oversupply, unless global stainless steel demand strengthens. That warning echoed wider concerns across the ferrochrome industry that a Chinese-driven glut could limit how much benefit restarted South African smelters see even as they return to production.

Why it matters

Merafe's results illustrate the uneven recovery under way in South Africa's chrome sector: a raw ore export business booming on Chinese demand, alongside a domestic smelting operation only slowly clawing back capacity lost to the electricity crisis. How quickly ferrochrome volumes recover through the second half of 2026 will determine whether Merafe's profit growth can be sustained once cheaper chrome ore comparisons fade.