Merafe Resources Profit Falls 72 Percent on Power Costs

Merafe Resources Limited has reported a 72% decline in full-year profit following the suspension of operations at its ferrochrome smelters in South Africa due to high electricity costs. For the fiscal year ending December 31, 2025, headline earnings per share fell to 12.2 South African cents from 42.9 cents in the previous period. The company idled its plants in April 2025, citing soaring power costs and increased competition from producers in China. This resulted in a 63% drop in ferrochrome output from the joint venture with Glencore plc, which produced 112,000 metric tons during the fiscal year. Production costs rose by 14%, largely due to the lower output levels. South African smelters have struggled with electricity tariffs that have increased by more than 900% since 2008, threatening thousands of jobs. In January, the energy regulator approved a 35% tariff reduction, allowing the company to restart its Lion smelter last month. Furthermore, state power utility Eskom offered an additional 29% tariff cut on February 27, pending regulatory approval.