By Ukumbi Afrika 
Johannesburg—South African chrome and ferrochrome producer Merafe Resources reported a sharp increase in half-year profit, helped by higher chrome ore prices and stronger sales despite lower ferrochrome production.
Merafe's headline earnings rose 64% to 518 million rand ($31.98 million) in the six months ended June 30, from 315 million rand in the same period last year.
The company said the stronger earnings were supported by improved chrome ore prices and sales, which helped cushion the impact of weaker ferrochrome production.
Interim Dividend Rises
Merafe declared an interim dividend of 0.16 rand per share, up significantly from 0.04 rand per share paid in the comparable period.
The increased payout signals stronger shareholder returns as the company benefits from improved conditions in the chrome ore market.
Ferrochrome Production Under Pressure
Despite the rise in earnings, Merafe's ferrochrome production remained under pressure, reflecting challenges facing South Africa's energy-intensive ferrochrome industry.
High electricity costs and weak global stainless-steel demand have continued to weigh on ferrochrome producers, while increasing Chinese production has added pressure to the international market.
Merafe operates through a joint venture with Glencore, one of the world's largest commodity producers and traders.
Chrome Market Remains Key
The performance highlights the growing importance of chrome ore sales to Merafe's earnings as the company navigates challenging conditions in ferrochrome production.
South Africa remains a major global source of chrome ore, a key raw material used in the production of stainless steel.
However, rising production in China and subdued stainless-steel demand could create additional pressure on ferrochrome prices and producers in the months ahead.
Merafe's results underline a broader trend across South Africa's mining sector: strong commodity prices can provide earnings support, but electricity costs, production disruptions and global demand remain critical risks.
For investors, the recovery of ferrochrome production and the direction of chrome prices will be important factors to watch in the second half of 2026.
Source: Reuters
Reporting: Nelson Banya and Olivia Kumwenda-Mtambo
Editing: Kirsten Donovan