Bloomberg News

China Overtakes South Africa on Ferrochrome Output, Merafe Says

August 07, 2012

China overtook South Africa as the largest ferrochrome producer this year, according to Merafe Resources Ltd. (MRF), which has a joint venture with Xstrata Plc. (XTA)

China accounted for 33 percent of the 4.8 million metric tons produced in the first half, while South Africa produced 32 percent, Johannesburg-based Merafe said today in a statement, citing data compiled by Heinz H. Pariser Alloy Metals & Steel Market Research.

South Africa’s market share fell as Eskom Holdings SOC Ltd., supplier of about 95 percent of the country’s power, took back electricity allocated to ferrochrome producers in return for payments to prevent a repeat of 2008 rolling blackouts.

South Africa shipped about 2.1 million tons of chrome ore to Chinese ferrochrome production plants in the first half, Merafe said, citing Chinese customs data. China is the world’s largest producer of stainless steel, made with ferrochrome.

Merafe has proposed a $100 a ton levy on unprocessed chrome-ore exports from South Africa to halt the trend. Talks with the government have advanced, Merafe said today.

The Xstrata-Merafe venture idled seven of its furnaces from February to May, prompting a 130,000-ton production loss, Merafe said in a copy of a presentation posted on its website. The effect of Eskom’s payment was “net positive,” it said.

Merafe owns 20.5 percent and Xstrata the rest of the South African venture that produces about 16 percent of the world’s ferrochrome, according to Merafe’s website.

To contact the reporter on this story: Carli Cooke in Johannesburg at clourens@bloomberg.net

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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