More details emerged over Afarak’s “disappointing” second-quarter results after blaming ore problems in South Africa. It seems some of Afarak’s South African ore sales to China were rejected since the quality of the ore was slightly below the agreed on specification. As a result, the price was renegotiated—not good in a falling market.
This ore problem also spilled over into its Mogale-produced charge chrome. The charge chrome produced with the ore resulted in material not to the specifications of the contracts for higher-quality specialty material.
Finally, there is speculation that Afarak would like to sell more chrome ore rather than using it at Mogale but that would inflame tensions with the unions.