South Africa Offers Glencore Smelters Cheaper Power to Save Jobs

South Africa has предложed discounted electricity tariffs to ferrochrome producers linked to Glencore Plc and Samancor Chrome Ltd. in an effort to preserve jobs and stabilize the country’s struggling chrome processing sector.

The proposal follows months of negotiations between Glencore’s joint venture with Merafe Resources Ltd. and state-owned utility Eskom Holdings SOC Ltd.. In December, the Glencore-Merafe partnership extended consultations over approximately 1,500 potential job cuts as it sought relief from high energy costs.

Electricity and Energy Minister Kgosientsho Ramokgopa said the government and Eskom have предложed supplying smelters with power at 62 South African cents per kilowatt-hour — a tariff level previously requested by the ferrochrome industry. The announcement was made in Pretoria.

Eskom Chief Executive Officer Dan Marokane noted that companies would need to agree to the proposed framework, which includes risk-sharing measures and would require regulatory approval. The arrangement is designed to provide temporary stability while Eskom develops a longer-term pricing model for distressed, energy-intensive industries.

South Africa’s ferrochrome industry has been under severe pressure as electricity tariffs climbed and legacy preferential pricing agreements expired. Of the country’s 66 smelters, only 11 remain operational, highlighting the sector’s contraction.

Earlier interventions by the National Energy Regulator of South Africa resulted in a 35% price reduction for smelters for one year. That measure enabled the restart of the Glencore-Merafe Lion smelter in Limpopo province. According to Japie Fullard, CEO of Glencore Alloys, the Lion plant can roughly break even at around 87 cents per kilowatt-hour.

However, the joint venture’s Boshoek and Wonderkop smelters — both shut down in December — require electricity priced at 62 cents per kilowatt-hour to operate sustainably. The newly proposed tariff would therefore be critical to restarting those facilities.

Labor union Solidarity has warned that closures across Glencore, Samancor and Columbus Steel operations could affect thousands of workers, underscoring the social and economic stakes tied to the government’s intervention.

Although Eskom has recently stabilized electricity supply after years of rolling blackouts that constrained economic growth, energy-intensive industries continue to grapple with elevated tariffs. The proposed discounted power deal represents a targeted attempt to prevent further deindustrialization while balancing Eskom’s financial recovery with broader employment considerations.

The outcome of the negotiations will likely shape the future of South Africa’s chrome value chain, a sector that plays a significant role in global stainless steel production and domestic mining employment.