Merafe Resources

Our Business / Operating context

Operating context

90%

of the ferrochrome produced is used in stainless steel and speciality steels

Global Stainless steel production increased from 55.9mt in 2022 to 57.5mt in 2023

Stainless steel production in China was 35.2 million tonnes (mt) in 2023

THE GLOBAL POSITION OF FERROCHROME

Elements influencing the global demand for and pricing of ferrochrome:

  • Global economic conditions
  • Exchange rates
  • Stainless steel demand
  • Growth of Chinese ferrochrome industry
  • Chrome ore exports





Our competitive advantage

Elements influencing the global demand for and pricing of ferrochrome:

  • Lowest-cost producer in South Africa
  • Flexibility provided by variety of cost-efficient technologies
  • Savings in energy consumption per tonne of alloy produced as a result of major investments in energy efficiency (Lion Complex and two pelletising and sintering plants)
  • Lion II achieves further energy efficiencies
  • Significant chrome ore reserves and access to UG2

Ferrochrome production and its role in stainless steel

Produced by high-temperature reduction (smelting) of chromite, ferrochrome contains iron, chrome, minor amounts of carbon and silicon, and impurities such as sulphur, phosphorous and titanium.

Chrome is a metallurgical marvel. It brings critical properties to the metals with which it is alloyed.

Add it to carbon steel in the form of ferrochrome and the steel becomes "stainless" – corrosion resistant, mechanically strong, heat resistant, hard wearing and shiny. Stainless steel is used almost everywhere in modern life, from nuclear reactors to exhaust pipes, architecture, kitchenware and a host of other applications.

Specialty steels produced for applications such as tools, injection moulds, camshafts, etc. also derive the high mechanical strength, hardness and heat resistance required from their chrome content.

Key statistics for 2023

  • Global ferrochrome production increased from 15.1mt in 2022 to 15.4mt in 2023
  • Ferrochrome demand increased from 13.9mt in 2022 to 14.5mt in 2023
  • South Africa's share of global ferrochrome production was 3.2mt (2022: 3.9mt)
  • China imported approximately 14.9mt chrome ore from South Africa (2022: 12.3mt)

South African Chrome Industry

Facts

Approximately 3.2mt of the world's ferrochrome production of 15.4mt was supplied by South Africa in 2023

Over 72% of the world's chrome reserves are in South Africa

The industry provides a significant number of direct and indirect jobs in South Africa

Challenges faced by South African ferrochrome producers

  • Increasing production costs
    • electricity
    • labour
  • Socio-political challenges
  • Legislative uncertainty
  • Commodity prices and demand
  • Chrome ore exports
  • Electricity supply
  • Logistics