Merafe Resources Limited (JSE:MRF)
1. About
Merafe Resources Limited (JSE:MRF) is in the business of Ferrochrome production. In 2004 Merafe and Glencore pooled their chrome operations to create the largest ferrochrome producer in the world.
Merafe Ferrochrome and Mining Proprietary Limited is a wholly owned subidiary of Merafe. Merafe retains 20.5% of the earnings before interest, tax depreciation and amortisation (EBITDA) of the Glencore-Merafe Chrome Venture (the Venture) with Glencore receiving the remaining 79.5%.
Ferrochrome
Merafe's strategy is to ensure that its ferrochrome interests are profitable and sustainable and that they add value to all stakeholders. The company aims to achieve this by:
- extracting chrome ore from the Venture’s mines and beneficiating it in its smelters in a safe and cost-efficient manner;
- investing in projects such as the Bokamoso and Tswelopele pelletising and sintering plants and the Lion ferrochrome plant Phases I and II that improve the energy and cost efficiency of the Venture's ferrochrome operations;
- employing the Venture’s proprietary Premus technology to ensure that it is the lowest-cost producer of ferrochrome in South Africa and, despite rising energy costs in South Africa, remains in the lowest quartile of the global ferrochrome production cost curve;
- using the flexibility provided by the Venture’s variety of technologies to meet changing operating circumstances and customer requirements; and
- focusing on reducing costs at the operations and head office.
The Company may also consider acquisitions outside of ferrochrome on an opportunistic basis.