Johannesburg, April 22, 2026, 19:15 SAST
- South Africa’s energy regulator opened a public comment and hearing process on Eskom pricing agreements covering Samancor Chrome and the Glencore-Merafe Chrome Venture.
- The proposed 62 cents-per-kilowatt-hour tariff is aimed at keeping power-hungry ferrochrome smelters alive after a sharp rise in electricity costs.
- Glencore-Merafe’s final acceptance still depends on regulatory approval and other conditions, with a retrenchment deadline now pushed to May 11.
South Africa’s energy regulator on Wednesday moved Glencore plc’s chrome smelter rescue plan into a public process, calling for written comments and a hearing on changes to Eskom’s negotiated pricing agreements with Samancor Chrome and the Glencore-Merafe Chrome Venture. The step puts the proposed power tariff relief before the National Energy Regulator of South Africa, or Nersa, after weeks of talks over whether smelters can restart without fresh job cuts.
The matter is urgent because electricity has become the make-or-break cost for South Africa’s ferrochrome industry. Ferrochrome, an alloy of chromium and iron used mainly in stainless steel, is made in furnaces that consume large amounts of power; high tariffs have helped push South Africa behind Chinese producers even though the country remains a major chrome ore holder.
Eskom said on April 10 it had concluded a 62c/kWh electricity tariff for Samancor Chrome and Glencore-Merafe smelters, subject to Nersa approval. The utility said the plan would improve its liquidity, give it predictable sales volumes for up to five years and avoid higher general tariffs, new borrowing or more government support.
Glencore-Merafe said it had provisionally accepted Eskom’s revised terms, but only subject to clarifications, wider industry agreement and Nersa approval. The venture asked for the regulatory process to be handled urgently and extended the termination date of its Section 189 labour process, South Africa’s formal retrenchment consultation procedure, to May 11.
Japie Fullard, chief executive of Glencore Ferroalloys, told Argus this week that Glencore would restart ferrochrome output at shuttered South African operations after Eskom guaranteed tariff relief. “The 62 [cents/kWh] will actually give us just a breakeven,” Fullard said, adding that under that power cost Glencore-Merafe would “keep our people in jobs” rather than make money from ferrochrome. Argus Media
The lower tariff follows an interim 87.74c/kWh rate and compares with the 1.36 rand per kWh paid at the end of 2025, Reuters reported earlier. Eskom’s February cut was pitched as a way to prevent thousands of job losses, with only 11 of a possible 66 South African smelters then operating, mainly because of power costs.
The competitive pressure is direct. Samancor and Glencore-Merafe are the main local ferrochrome players in the relief package, while Chinese producers have gained ground as South African smelters shut or slowed. Argus reported that power accounts for 30% to 40% of production costs for South African ferrochrome producers.
Fullard told Argus that Samancor and Glencore together produced about 1 million tonnes of ferrochrome in 2025 and could produce as much as 4.5 million tonnes a year under the new deal. He also said the agreement included upside-sharing, under which Eskom would receive part of profits if market conditions improve.
But the deal is not done. Nersa still has to approve amendments to the pricing agreements, and Glencore-Merafe has framed its acceptance as conditional. A delay, tougher conditions or a weaker chrome market could still leave parts of the smelter base uneconomic, particularly if Chinese energy costs fall or South Africa fails to improve industrial power supply over the longer term.
For Glencore, the decision is smaller than its copper, coal and trading businesses, but it matters for its South African footprint and for a government trying to hold industrial jobs. The company’s London shares were among miners including Fresnillo, Rio Tinto and Anglo American that gained 2% to 3% on Wednesday as metals prices rose, even as the FTSE 100 closed 0.2% lower.
