JOHANNESBURG, April 1, 2026, 14:08 SAST
Glencore’s South African chrome joint venture extended the deadline for its retrenchment talks to April 7, giving Eskom more time—another week—to wrap up internal sign-off on a discounted electricity rate. The Glencore-Merafe Chrome Venture confirmed that a 62 South African cents per kilowatt-hour rate has in-principle approval, though the final commercial terms are still being hammered out. 1
The additional week is pivotal: the outcome of the tariff could determine if the planned job cuts are still avoidable and whether the venture can sustain its ferrochrome operations commercially. On Tuesday, Merafe told shareholders it had already lodged a counterproposal back on March 12, and the partners agreed to push the Section 189 consultation—a process under South Africa’s Labour Relations Act regarding possible job losses—out to April 7. 2
Ferrochrome—vital to stainless steel—has landed squarely in the government’s strategy to revive the struggling smelting industry. In February, Eskom dropped its proposed power rate for Glencore-Merafe and Samancor Chrome to 62 cents per kWh, down from the interim 87.74 cents, and sharply lower than the 1.36 rand slated for late 2025. At that point, just 11 of South Africa’s 66 smelters were still running. Electricity Minister Kgosientsho Ramokgopa called the move “significant,” saying the government aims to see 45 smelters running by December. 3
Still, the dispute hasn’t gone away with lower power prices. In a March 25 statement, the venture argued that some of the draft conditions attached to the tariff would leave the deal “commercially unworkable, uncompetitive and unsustainable.” It also cautioned that retrenchments could follow if a viable agreement isn’t reached and submitted to energy regulator NERSA. 4
Japie Fullard, CEO of Glencore Ferroalloys, didn’t mince words on March 19 at a Johannesburg mining conference. “The terms and conditions, the way that it is now, I unfortunately will not be in a position to sign,” Fullard said. Glencore will walk away from the 62-cent package unless it’s amended, he warned. Up to 1,500 jobs hang in the balance if nothing changes. 5
Glencore isn’t alone under strain. Samancor—the other ferrochrome producer granted the lower tariff—has gone back to its layoff process, putting around 2,400 jobs at risk. The company argues the existing terms continue to jeopardize the sector’s long-term prospects. 6
The numbers tell the story. Merafe said on March 9 that ferrochrome output from its joint operation with Glencore plunged 63% to 112,000 metric tons in 2025, as plant shutdowns hit in April 2025. Production costs didn’t stand still either—up 14%. Lower volumes pushed unit costs even higher. 7
Back in February, when Glencore posted its annual numbers, CEO Gary Nagle struck a more optimistic tone. He said he was “confident” the company would land a competitive tariff once Lion smelter was back online. Over at Boshoek and Wonderkop, Fullard reckoned they’d have a “fighting chance” if electricity costs came in at 62 cents per kWh. 8
The South African dispute comes just weeks after Rio Tinto’s takeover negotiations with the London-listed, Swiss-headquartered miner fell through. Back in February, Glencore posted 2025 adjusted EBITDA of $13.51 billion, topping the analyst consensus of $13.3 billion. Deutsche Bank analysts are now watching to see what management does next. 9
The next key date is April 7. Eskom hasn’t wrapped up its internal governance process yet, but the venture is holding out hope for a viable tariff agreement in the days ahead. 10
