Merafe Resources, junior partner in the chrome joint venture headed by the world’s largest commodities trader, Glencore, is likely to remain a strong dividend payer after a record-high interim payout of R200m as uncertainty over electricity prices hampers investments. Glencore-Merafe Chrome Venture is one of the world’s largest producers of ferrochrome, used in the production of stainless steel. It is an electricity-intensive product to make. "We have to adapt to the reality that things have changed in SA. If you go back 20 years, it was very simple: you built smelters, we had the cheapest electricity," said Deon Dryer, MD of the joint venture at a results presentation on Monday. Due to "uncertainty with electricity prices, it doesn’t make sense for us to look at Lion 3 [ferrochrome project] … we are not looking to expand in smelting capacity. If things changed and preferential tariffs are offered by the government, that’s something we would look at and [we would] expand again, but ...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now