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Shares in Merafe Resources, the junior
partner in a joint venture in Glencore's SA operations, jumped more than 10% on
Tuesday morning, when it reported that a weaker rand and higher chrome prices
helped it up its interim dividend by two-thirds.
Net cash climbed more than a quarter to
R1.6 billion in the six months to end-June, the group said on Tuesday, when
chrome ore prices remained elevated due to a lack of supply growth and
continued logistics constraints out of SA, which represents over 90% of global
seaborne trade. This echoes similar comments by JSE-listed Tharisa resources.
Merafe, valued at over R3 billion on the
JSE, is part of a joint venture with mining and trading giant Glencore -
formerly Xstrata - formed the 2004. They had pooled their chrome operations,
with Merafe receiving 20.5% of the core profit from the venture. During its
half year, it also received a boost from an 18% weakening of the average rand
to dollar exchange rate.
The group upped its dividend two thirds to
20c per share, about a R500 million payout.
"Logistics challenges continue with
not much improvement in rail availability," the group said. "The
chrome industry and Transnet Freight Rail continue to collaborate on improving
rail performance."
The group expects the second half to be
softer on a weaker market outlook, saying chrome prices have already started
abating.
Shares in the group were up almost 11% in
late morning trade but have still fallen 5% on a one-year basis.