Merafe restarts two ferrochrome smelters after Eskom tariff deal

Merafe Resources has begun bringing two ferrochrome smelters back into production after reaching new electricity pricing agreements with Eskom in June, more than a year after both operations were suspended.

The company said on Tuesday in its production report for the nine months to September that the Boshoek smelter, near Rustenburg in North West province, began restarting in September, followed by Wonderkop, in the Marikana area, in October. Production at the two operations is expected to ramp up through the fourth quarter.

The restarts come as South Africa's ferrochrome industry grapples with high electricity costs and competition from lower-cost international producers. Electricity costs for the industry had risen by more than 900% since 2008, putting pressure on the competitiveness of local smelting operations.

The two smelters were suspended in May 2025 as the economics of operating them came under pressure. Their prolonged closure contributed to a 46% fall in Merafe's attributable ferrochrome production to 61,000 tonnes in the nine months to September, from 112,000 tonnes in the corresponding period last year.

The electricity agreements followed months of negotiations between the ferrochrome industry, Eskom and government to support struggling smelters in a sector regarded as strategically important to South Africa's mining and industrial economy.

Merafe's chrome ore production fell 7% to 658,000 tonnes in the nine months to September, from 710,000 tonnes in the same period last year. The company attributed the reduction to lower mine production and less ore processed through its concentrators.