South African executive and long-serving Merafe Resources CEO Zanele Matlala has led the company to a R518 million ($32 million) profit in the first half of 2026, as higher chrome ore prices and sales volumes cushioned the impact of lower ferrochrome production. Matlala retired as chairperson of Stefanutti Stocks Holdings Limited on August 7, 2026.

Merafe’s latest performance ranks as its fourth-highest half-year profit on record since its R1.049 billion ($64.61 million) peak in 2023, helping offset lower ferrochrome production from its Glencore joint venture after several smelters were suspended.

Chrome ore prices lift Merafe earnings

Merafe Resources reported a 64.4% surge in headline earnings of R518 million ($32 million) for the six months ended June 30, up from R315 million ($19.39 million) a year earlier. Higher chrome ore prices and a sharp increase in sales volumes drove the gain, with chrome ore revenue rising 78% to R1.8 billion ($110.78 million) during the six months ended June 30.

The more than 64% increase in half-year profit comes even as its ferrochrome production plunged 75%, highlighting the growing importance of chrome ore to the South African producer’s earnings. Merafe Resources’ stronger first-half earnings were driven primarily by its chrome ore business, which benefited from higher prices and increased sales volumes.

Sales volumes increased 75%, while the chrome ore price rose 11%, providing a significant boost to the company’s revenue and earnings. The performance highlights the growing importance of chrome ore to Merafe as its ferrochrome operations continue to face production and cost pressures. The increase in chrome ore earnings also helped cushion the impact of lower ferrochrome production from Merafe’s joint venture with Glencore.

Ferrochrome production falls 75%

Despite the increase in headline earnings, Merafe’s attributable ferrochrome production plunged 75% to 28,000 metric tons during the first six months of 2026.

The decline followed the suspension of production at the Wonderkop and Boshoek smelters, as well as a partial suspension of operations at the Lion smelter. Ferrochrome is an energy-intensive alloy of iron and chromium that is primarily used in stainless steel production. Its production in South Africa has come under sustained pressure from high electricity costs, making it increasingly difficult for domestic smelters to compete with lower-cost producers.

The sharp decline in Merafe’s ferrochrome output therefore illustrates the continuing pressure on South Africa’s downstream chrome-processing industry, even as demand and prices for chrome ore provide support elsewhere in the value chain.

Merafe eyes smelter production restart

Merafe moved to address the production decline after announcing plans in June to restart the Wonderkop and Boshoek smelters. The planned restart followed approval by South Africa’s energy regulator, Nersa, of a discounted electricity tariff intended to support ferrochrome producers facing high operating costs.

Operations at the Lion smelter had already resumed in February, providing an early step toward restoring some of Merafe’s ferrochrome production capacity. The lower electricity tariff forms part of broader efforts to support South Africa’s ferrochrome industry and prevent further smelter closures.

South Africa remains a major global producer of chrome ore, but the country has lost its position as the leading processor of chrome ore into ferrochrome to China. High electricity costs have been one of the key factors behind the shift in processing activity. For Merafe, restarting suspended smelters could therefore provide an important route to rebuilding ferrochrome output, although the economics of production will remain closely tied to electricity prices.

China supply clouds ferrochrome outlook

Despite the improvement in first-half earnings, Merafe expects the ferrochrome market to remain challenging during the second half of 2026.

The company warned that increased supply from China, combined with weak global stainless steel demand, could create an oversupplied ferrochrome market and put additional pressure on prices.

That would present another challenge for South African producers already dealing with elevated electricity costs and reduced domestic processing capacity.

The outlook is particularly important for Merafe because the recovery of its suspended smelters could increase production at a time when additional Chinese supply is potentially weighing on global market conditions.

The company’s second-half performance will therefore depend on several factors, including the pace of smelter restarts, electricity costs, chrome ore prices, global stainless steel demand and the balance between Chinese supply and international demand.

What Merafe’s results mean

Merafe’s first-half results show how stronger chrome ore prices and sales volumes can support earnings even when ferrochrome production remains under severe pressure.

The 64% increase in headline earnings demonstrates the benefit of Merafe’s chrome ore exposure, while the 75% decline in ferrochrome production highlights the structural challenges facing South Africa’s smelting industry. The planned restart of suspended smelters could improve Merafe’s production profile, but the recovery will depend on whether lower electricity costs can make domestic ferrochrome production more competitive.

At the same time, increased Chinese supply and weak stainless steel demand could limit the benefits of higher production if ferrochrome prices remain under pressure.