Merafe inks wage deal

Merafe Resources says its Glencore-Merafe Chrome Venture has inked a three-year wage deal with all its major unions.

Johannesburg - Merafe Resources says its Glencore-Merafe Chrome Venture has inked a three-year wage deal with all its major unions.

In a statement to shareholders, the listed company notes the wage agreement at its operations “for increases in line with current industry trends”.

Merafe previously said a three year agreement was signed at the venture’s western mines, effective July 1, 2014.

This new deal is retrospectively effective at its western and eastern smelters from this past July.

The listed miner earns its revenue and operating income mostly from its 20.5% stake - on an earnings before interest, tax, depreciation and amortisation basis - in the Glencore Merafe Chrome Venture.

This mine, says Merafe, is the “global market leader in ferrochrome production” with the ability to produce 2.3 million tons of ferrochrome a year.

In the six months to June, the miner reported revenue 12 percent higher at R2.2 billion thanks to a 12 percent increase in ferrochrome sales to 191 000 tons.

Merafe also benefited from an increase in chrome ore sales volumes and an 11% weaker rand/dollar exchange rate. This was partially reduced by an 11% decrease in net ferrochrome prices.

Merafe reported profit of R124.3 million in the first half, which is lower than the R224.7 million reported a year ago. However, this takes into account higher depreciation and net financing costs, although it scored on the tax front.

The venture also anticipates increasing capacity when its 360 000-tons-a-year phase II of the Lion ferrochrome plant is completely online.

IOL