Merafe and Glencore to keep most of their smelters in mothballs

The Glencore-Merafe Chrome Venture intends to keep the bulk of their smelters in care and maintenance, citing an uncertain global economic environment.

“The venture’s Boshoek, Rustenburg, Wonderkop, Lydenburg smelters and Kroondal mine will remain under care and maintenance,” Merafe said. The  venture had restarted operations at the Lion smelter and Eastern Chrome mines.

“The decision to restart these operations will be kept under review and is subject to an improvement in the macroeconomic environment, which was challenging even before the impact of Covid-19.”

Merafe Resources holds a 20.5% stake in the venture, from which the company derives most of its earnings, while Glencore holds the remaining 79.5%.

This includes five ferrochrome smelters, 22 ferrochrome furnaces, five chrome ore mines and six plants, in three provinces.

In January, the venture said it was restructuring its Rustenburg chrome smelter, one of SA’s largest, due to the state of the global market as well as power interruptions and price increases from state-owned electricity monopoly Eskom.

Merafe’s share was unchanged at 43c in morning trade on Friday, having halved so far in 2020. Glencore’s share had added 2.44% to R34.91, having lost 19.53% in the year to date.