JOHANNESBURG (miningweekly.com) - The Xstrata-Merafe chrome venture will increase its ferrochrome production capacity in South Africa to 85% from Tuesday, as demand for the stainless steelmaking ingredient strengthened.

The JSE-listed Merafe, headed by CEO Steve Phiri, said on Tuesday that the venture would recommission several of its furnaces at its five ferrochrome operations.

Merafe has already increased its production capacity to 60% in July, after it slashed its capacity to 20% late last year, as ferrochrome prices bottomed out and the company scrambled to maintain costs.

The black economic-empowered miner said it was monitoring ferrochrome demand and that capacity utilisation would be adjusted in line with variations in demand.

Merafe had not retrenched any of its 6 000 permanent workers during the economic downturn, which Phiri previously stated would enable the company to restart its furnaces fairly easily, as experienced staff were on hand.

Merafe's share price jumped by 5% on the news to trade at R1,68 a share. The company's stock closed at R1,63 a share.