Wedoany.com Report on Mar 10th, South African mining company Merafe Resources recently released its annual financial report for the period ending December 31, 2025, showing a 31% year-on-year decrease in revenue to 5.84 billion rand, with headline earnings per share (HEPS) plunging 72% to 12.2 cents. Basic earnings per share fell 79% to 5.7 cents, but the final cash dividend remained unchanged at 8 cents per share.
During the results presentation on March 9, CEO Zanele Matlala stated: "The decline in revenue and earnings per share is primarily due to all operating furnaces being idle since the second quarter of 2025." Consequently, ferrochrome production decreased by 63% to 112,000 tons, and profit dropped to 143 million rand, attributed to reduced ferrochrome sales and a stronger rand against the US dollar.
CFO Ditabe Chocho added that annual capital expenditure was 447 million rand, of which 186 million rand was allocated to smelting operations. Matlala explained that high electricity costs were a key reason for the furnace shutdowns, and the company is working with state-owned power utility Eskom to find a sustainable electricity pricing solution. Following a business review in April 2025, all furnaces of the Glencore-Merafe Chrome Venture were shut down, leading to lower production and increased fixed costs.
The South African National Energy Regulator (Nersa) approved an interim electricity price of 87.74 cents per kilowatt-hour in February. Matlala said: "A lower electricity price is crucial for restarting the Wonderkop and Boshoek furnaces." The Lion furnace restarted in mid-February, but the current electricity price is insufficient to restart the other furnaces. Eskom has proposed a price of 62 cents per kilowatt-hour, and the company is evaluating the associated conditions.
Merafe Resources performed better in its chrome ore business, with sales volume increasing 44% to 683,000 tons, and platinum group metals (PGM) sales rising 10% to 14,948 ounces. The company's chrome management agreement with Sibanye-Stillwater has been approved and is now effective, expected to optimize production and reduce costs.
Looking ahead, Merafe Resources stated that smelting operations remain under pressure, and their feasibility depends on reducing energy costs and improving global demand. The company takes a cautious view for 2026 and will continue to focus on efficient operations and cost control, committed to creating value for stakeholders.
