Manufactured capital

Operational review

Merafe’s attributable ferrochrome production increased marginally from 300kt in 2023 to 301kt for the year ended 31 December 2024. Rustenburg smelter was idled for the full year, however volumes produced were not impacted as the operation continued operating in the winter months.

The total unit cost of ferrochrome production increased 2% year-on-year. The increase was driven by higher chrome ore market prices and fixed costs which were offset by lower reductant and plant cost. Fixed cost were impacted by an increase in the electricity demand fee.

The Chrome mines’ (including UG2) saleable chrome ore production for 2024 was 6% less than the previous year.

Chrome produced at the mines in 2024 was 4% less than in 2023 mainly due to the Waterval West project that came to an end, coupled with a lower ROM at Eastern mines as a result of conveyor upgrades, breakdowns, safety stoppages and plant shutdowns.

Lower tonnages (12%) at the UG2 operations were mainly due to less dispatches from K plants (methodology change in 2024 to show K1 and K2 as buy-ins, previously shown as production), less feed received from PGM concentrators and the end of the Mototolo contract in August 2024.

The Chrome mines’ (including UG2) saleable chrome ore production costs for 2024 were 12% higher than the prior year.

Production costs from mines were 10% more than the prior year mainly due to less volumes produced, lower yield and above inflationary increases.

Production costs from the UG2 platinum tailings were 18% higher than the prior year mainly due to higher prices paid for raw material from PGMs producers (linked to Chrome ore market prices) coupled with the impact of lower volume.

Saleable PGM production increased from 6 588oz to 13 957oz as a result of the inclusion of the Eastern PGM plant for full year and improved yields. The PGMX plant has been commissioned and is now producing concentrate.

Electricity supply

The supply and cost of electricity continues to be a risk for our operations, however for the most part of 2024, there was uninterrupted power supply which is positive. Electricity tariffs increased by 12.65% in April 2024 and NERSA has approved tariff hikes of 12.74% effective 1 April 2025.

The Venture concluded Negotiated Pricing Agreements with Eskom which became effective in January 2024. The effect of these agreements provides price predictability and does cushion the Venture from double-digit increases.

Reductants

The cost of reductants was significantly lower, due to better market prices.

Safety

Sadly, for the year 2024, we recorded one fatality at our Wonderkop facility. However, our TRIFR improved by 1.47% reaching 2.31 (2023: 2.34).

The safety of our employees is our top priority. We are committed to continuously improving our safety performance, focusing on the four key areas identified in our turnaround strategy: risk management; effective supervision; safety culture; and contractor management.

Venture safety performance

We continue to monitor pandemics and other related diseases for any concerning trends that might impact our workforce, ensuring that necessary controls are implemented promptly.

Our commitment to creating a healthy work environment remains steadfast. We will review all health risk assessments and maintain our pre-, annual and exit medical surveillance to monitor the occupational health of our workforce. Implementing our Health Standards and Health Hazards Exposure Limits is a core strategic focus, integrated with our baseline review to confirm exposure through quantitative data analysis.

Railways and ports

The deteriorating infrastructure of the railways and the ports continues to be a challenge to the South African ferrochrome industry. The inability to transport our product and inefficiency at the ports causes an excessive reliance on road transport. Inefficiency at the ports also results in backlog and delays at the harbours. This not only results in delays in shipping our product (and impacts the reputation of South African producers as being reliable suppliers), but also creates opportunities for corruption and theft. The Venture continues to engage proactively with the relevant governmental departments in its attempt to find solutions to these critical issues.

Although we faced significant logistical challenges, we were able to meet the projected shipment volumes for 2024. Rail transport continued to experience difficulties, particularly with issues like cable theft, which led to a noticeable shift toward road transport for bulk commodities. This transition added pressure to South African port operations, impacting their efficiency. Later in the year, political unrest in Mozambique disrupted cargo movement along the Maputo corridor, affecting both road and rail deliveries to the port.

Health

TRIFR 2008–2024 (TRIFR)