South Africa’s power utility, Eskom, announced on Friday a 29% reduction in electricity prices for two struggling ferrochrome producers in an effort to prevent thousands of job losses.
Samancor Chrome and the joint venture between Glencore (GLEN.L) and Merafe Resources (MRFJ.J) will now pay 62 South African cents per kilowatt-hour under the new tariff regime, down from an interim tariff of 87.74 cents per kilowatt-hour approved by South Africa’s energy regulator in January.
Previously, the smelters were paying 1.36 rand ($0.0851) per kilowatt-hour at the end of 2025, Reuters reported.
South Africa’s smelting sector has faced steep electricity cost increases, rising more than 900% since 2008, which has forced dozens of plants to shut down.
Energy Minister Kgosientsho Ramokgopa said initial relief would target the two smelters that had already begun retrenchment processes, while noting that the government was considering broader tariff support for the sector.
Only 11 out of a possible 66 smelters are currently operating, mainly due to high power costs, he told a media briefing.
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“As a result of this intervention, we expect that by December of this year, we’re going to have 45 smelters operating and by December 2027, we will have 49 smelters operating. So this is significant,” Ramokgopa added.
Merafe Resources, which jointly owns three smelters with Glencore, said on February 18 that it had resumed operations at one of the three smelters it shut down in May 2025 following the January 2026 power tariff reduction.
The other two smelters will require the lower tariff of 62 cents per kilowatt-hour, the company said.
South Africa, the world’s largest chrome ore producer, has lost its position as the top processor of chrome into ferrochrome to China, primarily due to high electricity costs.
Energy-intensive smelters combine chromium and iron to produce ferrochrome, which is mainly used in steel production.
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Image Credit: Bloomberg
