FERROCHROME producer Merafe Resources reported a hike in production from its joint venture with Glencore due to the easing of Covid-19 restrictions and plant efficiencies.
It announced that a new platinum group metal (PGM) production plant was being constructed at its Kroondal mine.
The mining firm, whose primary source of income is the Glencore-Merafe joint venture, said production had risen 5.1 percent to 102 000 tons and attributable production to 379000 tons, a 42.7 percent increase in the fourth quarter and year-ended December, 31, 2021.
The Glencore-Merafe Chrome venture operates five ferrochrome smelters and eight mines. Improved plant efficiencies achieved at their smelters also bolstered ferrochrome production.
While the company announced the increase in production, its shares tumbled lower to end the day 2.99 percent lower at at R1.30 on Friday. Year-to-date, the shares are up 9.24 percent.
In August 2021, the mine announced that it had returned to profitability and rewarded shareholders with an interim dividend on healthy growth during the half-year ended June 2021.
Merafe also announced that it, and Glencore Operations South Africa Proprietary, had reached an agreement to contribute to the joint venture of a new platinum group metal (PGM) production plant that is being constructed at the Kroondal Mine.
"The new PGM plant’s main operations will be the treatment of PGM-bearing material derived from the mining operations at the joint venture's western chrome mines available in applicable tailings facilities and dams; and from certain mining operations in the vicinity of the Kroondal Mine to which Glencore SA and/or Merafe directly or indirectly have/has rights concerning PGMs," the mine said.
According to the mine, the operations of the new PGM plant are governed by the existing unincorporated joint venture's notarial pooling and sharing agreement between Merafe and Glencore SA.
PGM miners play a critical role in the automotive sector. Last year, PGM prices surged, boosting the sector. Chrome ore prices also lifted the basket price of PGMs in the past two years.
Meanwhile, Merafe Resources said the government’s plan to impose a tax on chrome exports would boost its business case. The group said the ore tax was approved in principle and the government should implement it.
BUSINESS REPORT ONLINE