Merafe Resources saw its income in the second half of 2012 fall 58% to ZAR48.9-million from ZAR116.8-million in the same 2011 period. The company’s share (20.5%) of ferrochrome sales from its venture with Xstrata in 2012 was 255,000 mt in the second half of 2012 compared to 254,000 mt in the second half of 2011. By extension, Xstrata’s income from ferrochrome should have dropped by the corresponding 58%, but Xstrata did not break out its revenue, earnings, or even sales of ferrochrome or chrome ore for the second half of 2012.

 

Merafe’s chrome ore revenue as a percentage of total revenue decreased from 14% in 2011 to 13%. Merafe’s share of EBITDA from the venture was ZAR349.4-million in the second half of 2012 against ZAR464.4-million in 2011. The 2012 EBITDA included a foreign exchange loss of ZAR3.9-million, compared with a foreign exchange gain of ZAR80.9-million 2011.

 

Merafe said the decrease was primarily a result of a lower average European benchmark ferrochrome price and an increase in costs, partially offset by the weakening of the rand against the dollar.