JOHANNESBURG, April 7, 2026, 14:17 SAST
Glencore’s South African ferrochrome operation was up against a Tuesday deadline to nail down discounted power terms with Eskom, after putting retrenchments on hold for just a week. That deadline puts pressure on both Glencore and its partner Merafe, who are already running with reduced production and now have almost no leeway left for extending negotiations.
This isn’t just about the main tariff number anymore. Eskom and the venture have tentatively agreed to a rate of 62 South African cents per kilowatt-hour, though key conditions remain unresolved. The structure still requires a green light from NERSA, the country’s energy regulator.
Ferrochrome — the alloy combining chromium and iron, mainly destined for stainless steel — is now front and center as South Africa tries to hang on to more of its mineral processing. Since 2008, smelter power costs have rocketed by over 900%. Out of 66 smelters, just 11 are currently up and running. That’s left South African producers wide open to competition from China.
Glencore and Merafe, in a March 31 update, said Eskom was still working through its internal governance approvals, with the Section 189 process now pushed back to April 7. Section 189, under South African labor law, is the required consultation step before any retrenchments.
Eskom Group Chief Executive Dan Marokane said the company had “supported a framework” for a 62 cents per kilowatt-hour tariff, following a temporary step up to 87.74 c/kWh in January that only brought brief stability. According to Eskom, any long-term agreement must strike a balance: offer relief to industry, keep financial discipline intact, and not offload costs onto households or other businesses. Eskom
Glencore isn’t budging just yet. Ferroalloys head Japie Fullard made it clear last month: unless terms get reworked, the company is ready to “walk away” from the 62-cent offer, calling the existing deal impossible for him to sign. Reuters
It’s not just Glencore feeling the squeeze. Samancor Chrome, granted access to the same discounted tariff deal, has already restarted layoff plans—hard evidence that lower electricity prices haven’t delivered lasting stability for South Africa’s smelter operators.
The price of waiting is clear in the latest figures. Merafe reported that joint venture ferrochrome production dropped 63%, hitting just 112,000 metric tons in 2025. Unit production costs jumped 14% after the operation was halted, with soaring electricity prices and stiffer Chinese competition weighing on the business.
After the January tariff reduction, just one of the venture’s three smelters came back online. The other two remain idle—Merafe and Reuters both point to the need for the full 62 c/kWh rate for those to make sense financially. Tuesday isn’t just another date on the calendar; it’s a real test of whether South Africa’s rescue plan can turn official support into terms banks will actually finance.
The risk is obvious. Eskom could sign off on the package, but NERSA’s approval is still required—and the regulator’s tariff terms might render the whole thing a non-starter. Glencore last week spoke of hoping for a “balanced and workable solution,” but with the deadline arriving by Tuesday afternoon, time for further negotiation had all but evaporated. Eskom
