Merafe falls after profit warning

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FerroChrome REUTERS A labourer works in a ferrochrome factory. Ferrochrome is mainly used as an alloy in stainless steel to prevent corrosion.

Johannesburg - Shares of Merafe Resources fall more than 2 percent after the South African ferrochrome producer forecasts a drop in full-year earnings due to an impairment loss related to a potential sale of certain high-cost mining assets.

Merafe says basic earnings per share for the year are seen at between 1.7 and 2 cents, compared with 4.7 cents the previous year, while headline EPS is forecast at between 4.6 and 5.1 cents, down from 6.4 cents.

The company also says that 2012 production falls 8 percent due to weak demand and given Merafe's participation in Eskom's power buy-back programme, in which firms commit to suspend parts of their operations to help the power utility manage a tight electricity supply.

At 10:09 SA time, shares in the company are down 2.27 percent to 86 cents, compared with a 0.37 percent fall in Johannesburg's All-Share index. - Reuters

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