- Up to 1500 jobs at risk as negotiations over discounted electricity tariffs stall.
- Eskom proposes cutting tariffs to 62 cents per kWh, pending regulatory approval.
- Industry warns conditions attached to deal threaten long term viability.
Glencore Ferroalloys CEO Japie Fullard has warned that the company could withdraw from a government backed electricity discount arrangement if current terms are not revised, raising concerns over significant job losses in South Africa’s ferrochrome sector.
The warning places up to 1500 jobs at risk across Glencore’s South African operations. A deadline of 31 March 2026 has been set to conclude deferred retrenchment proceedings, adding urgency to ongoing negotiations.
The proposed intervention, led by Eskom, aims to stabilise the struggling ferrochrome industry through a substantial reduction in electricity tariffs for large scale producers, including the Glencore Merafe Chrome Venture and Samancor Chrome.
Under the proposal, electricity tariffs would be reduced from 1.36 rand per kilowatt hour to 62 South African cents per kWh. The initiative is designed to prevent the closure of loss making smelters, which remain critical customers for Eskom while also supporting employment across the value chain. However, the offer remains subject to approval by the National Energy Regulator of South Africa.
Despite the scale of the proposed discount, industry participants have raised concerns over the conditions attached to the agreement. Fullard indicated that the current terms make it impossible for Glencore to proceed, although specific details have not been disclosed due to ongoing negotiations.
Samancor Chrome has echoed similar concerns, warning that the structure of the deal could undermine the long term sustainability of the sector. The company has already indicated it will move ahead with layoffs, citing the agreement as a potential threat to industry viability.
The dispute comes against the backdrop of escalating electricity costs, which have risen by approximately 1000% since 2008, severely impacting the competitiveness of South Africa’s ferrochrome producers.
Operational capacity across the sector has contracted sharply, with only 11 out of 66 smelters currently in operation. The Glencore Merafe joint venture has already mothballed its Boshoek and Wonderkop smelters, while its Lion smelter has only recently resumed operations following a temporary suspension.
As negotiations continue, the outcome of the electricity pricing framework is expected to play a decisive role in determining the future of South Africa’s ferrochrome industry and its broader contribution to the country’s industrial economy.
Author: Bryan Groenendaal
