Merafe Resources reported a 72% drop in annual profit after suspending operations at its ferrochrome smelters due to high electricity costs.
The South African company announced on Monday (9) that earnings per share fell to 12.2 cents for the year ending December 31, 2025, compared to 42.9 cents previously.
The company, which has a ferrochrome joint venture with Glencore, suspended operations at its plants in April 2025, citing sharply rising energy costs and growing competition from China.
South African smelters have struggled to compete with Chinese rivals, with electricity tariffs rising more than 900% since 2008, putting thousands of jobs at risk.
In January, South Africa’s energy regulator approved a 35% reduction in electricity tariffs for Merafe and producer Samancor, which allowed the former to resume operations at its largest smelter, Lion, last month.
On February 27, state-owned energy company Eskom also proposed a further 29% tariff cut for struggling smelters, a measure that is awaiting approval from the regulator.
Source: Reuters
