[Ferrochrome] Merafe Resources Falls on Output Drop, Mine-Halting Strike – by Andre Janse van Vuuren (Bloomberg News – October 17, 2014)

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Merafe Resources Ltd. (MRF) declined the most in more than a year after the South African ferrochrome producer said third-quarter output fell 14 percent and some of its mines were shut by a strike.

Merafe, which owns 20.5 percent of the world’s largest ferrochrome operation in a venture with Glencore Plc (GLEN), dropped 8.9 percent in Johannesburg trading, the most since Aug. 7, 2013, to 1.03 rand by the close.

Ferrochrome output for the three months ended Sept. 30 decreased to 74,000 metric tons from 85,600 tons a year earlier as sales declined 18 percent to 60,200 tons, the company said in a statement today.

The venture’s western mines near Rustenburg, northwest of Johannesburg, have been shut since the last week of September after the National Union of Metalworkers started a pay strike, Investor Relations Manager Kajal Bissessor said today by phone. Its eastern operations and all smelters are fully operational, she said.

Merafe’s mines are close to the platinum belt in South Africa, where the world’s biggest producers have operations that were crippled by a five-month strike this year. The country was the largest producer of chrome ore in 2011, according to the U.S. Geological Survey. Ferrochrome is produced mostly in a higher-carbon format and used largely as a feedstock for stainless steel.

The strike “has no impact on current ferrochrome production or sales obligations,” Merafe said. Castro Ngobese, a spokesman for the union, didn’t immediately take calls seeking comment.

The decline in production was due to planned maintenance in July and August “as opposed to the prior year, when maintenance was performed in the first half,” Merafe said in its statement.

The venture’s Lion II project, adding 360,000 tons to an existing 1.98 million-ton capacity, will reach full production capacity by the middle of 2015, Merafe said.

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