China has overtaken South Africa as the world’s leading processor of chrome into ferrochrome, as soaring electricity prices continue to cripple the country’s smelting sector.
Although South Africa remains the largest producer of chrome ore, high energy costs have forced many smelters to shut down, reducing its share in value-added processing, as seen on Business Insider Africa.
Ferrochrome, used mainly in stainless steel production, is highly energy-intensive.
Since 2008, electricity prices in South Africa have risen more than 900%, and only 11 of 66 furnaces remain operational, according to Electricity Minister Kgosientsho Ramokgopa, who described the situation as a “major blow to industrial output and employment.”
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To ease the crisis, state utility Eskom cut tariffs by 29% for two distressed producers. Samancor Chrome and Glencore’s joint venture with Merafe Resources will now pay 62 cents per kilowatt-hour, down from 87.74 cents.
At the end of 2025, some smelters were paying 1.36 rand per kilowatt-hour, a level widely seen as unsustainable.
Ramokgopa said government intervention could restore operations: “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.”
Analysts warn that while tariff cuts may preserve jobs and revive production, South Africa’s ability to reclaim its ferrochrome dominance will depend on sustained energy reforms amid growing competition from China.
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Image Credit: Business Insider Africa
