TWO more ferrochrome smelters owned by the Glencore/Merafe pool and share joint venture (PSV) will be suspended over the next month, representing another blow to the South African government’s ambition of increasing local beneficiation.
In early March, Merafe warned shareholders it would complete a business review by May, which could result in more suspensions of operations. At that point, Merafe had 12 operating smelters left, after suspending ten others at Rustenburg and Lydenburg.
The main reason for the suspension is the 700% increase in electricity prices over the past seven to eight years. There has also been a surge in lower cost ferrochrome production by China, which has compressed global smelter margins.
Boshoek operations will be suspended from 1 May and Wonderkop from 31 May. During May, Wonderkop will process the remaining raw materials from the JV. After suspension, essential maintenance at both smelters will continue. These suspensions will remain in force indefinitely, until there is a change in ferrochrome market dynamics.
The Lion smelter will continue to produce ferrochrome for the rest of this year, Merafe said.
As Merafe has idled its smelters, it will resort to exporting chrome ore. Apart from the smelters, the joint venture also has four mines and two platinum group metals plants.
