Johannesburg — JSE-LISTED ferrochrome producer Merafe Resources announced yesterday CEO Steve Phiri would step down at the end of the month to take over the reins at a Royal Bafokeng-owned platinum company.

Phiri will become the first CEO of the company, which has as its main assets the currently operating Bafokeng Rasimone Platinum Mine and the adjacent Styldrift project.

Phiri will remain a nonexecutive director of Merafe. Its chief financial officer, Stuart Elliot - who has been with the company for nine years - will replace Phiri as CEO.

"With his experience and the experience of the established executive and management team at Merafe Resources, we envisage a smooth transition and see the company going from strength to strength," chairman Chris Molefe said.

Merafe said discussions were at an advanced stage on the appointment of a new chief financial officer, which was expected to be announced at the end of the month.

Phiri became CEO of Merafe in 2003 after being the corporate and legal adviser to the Royal Bafokeng Nation, the biggest shareholder in Merafe with a 30% stake.

The other major shareholder is the Industrial Development Corporation, with a 24% shareholding.

Under Phiri's leadership, Merafe embarked on a strategy to grow and diversify within the resources sector by using its empowerment credentials to access opportunities created by changes in South African mining legislation and the mining charter.

Merafe is part of the Xstrata-Merafe joint venture. The companies combined their operations in 2004 to form the world's largest ferrochrome producer.

Earlier this month, Merafe announced the collapse of its 50%-owned joint venture with Sentula, Merafe Coal, formed three years ago to develop coal projects in its portfolio, and to pursue other coal opportunities in SA. Phiri said Merafe would continue to look for coal opportunities independently.

Also earlier this month, Merafe reported a 34% drop in revenue to R1,8bn for the year to December, due to lower prices for ferrochrome and a strong rand.

This decline in revenue translated into a full-year headline loss of R152m, or 6c per share, compared with a profit of R1,027bn in the year to December 2008.

Despite the earnings fall, Merafe still paid an interim dividend of 2c a share.

Phiri forecast that production of stainless steel - of which ferrochrome is an essential ingredient - in China will increase nearly 20% to 30000 tons this year, which should bode well for ferrochrome demand and prices.

MERAFE RESOURCES

Full year 2009 2008

Revenue (Rbn) 1,8 2,78

Pretax (R) (218m) 1,47bn

Net income (R)(152m) 1,03bn

Headline EPS (c) (6) 42

Dividend PS (c) 2 -