Merafe Resources Limited, a leader in ferrochrome production, has decided to suspend operations at two of its smelters in South Africa. The Boshoek and Wonderkop smelters, part of the company’s joint venture with Glencore, will halt production because of ongoing market pressures. The decision follows a business review initiated in February.
Suspension Details
The Boshoek smelter will cease operations on May 1, 2025, and Wonderkop will stop production by May 31. Although metallurgical operations will stop, both smelting complexes will continue basic maintenance. The suspension will last until the ferrochrome market sees a significant recovery.
The Lion plant, also part of the joint venture, will keep operating and producing ferrochrome until the end of 2025.
Market Conditions Affecting Ferrochrome Production
Several market factors influenced the decision to suspend operations. The rise in electricity prices over the past 7-8 years has increased production costs for ferrochrome producers in South Africa. Additionally, cheaper ferrochrome from China has reduced profit margins for global smelters. As a result, Merafe Resources must adjust its production and supply chain strategies to cope with these pressures.
Global Ferrochrome Market Trends
Ferrochrome prices have dropped since mid-April, adding to the difficulties faced by producers. Many companies have had to modify their operations due to weak demand, even as production costs rise. As global ferroalloy prices struggle, the industry faces ongoing adjustments.
Conclusion
Merafe Resources’ suspension of operations at the Boshoek and Wonderkop smelters reflects the broader challenges in the ferrochrome market. The company is focused on maintaining flexibility and adapting its production strategies. While the suspensions will remain indefinite, the Lion plant will continue to ensure stable ferrochrome output.
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