Johannesburg, April 22, 2026, 19:15 SAST
- South Africa’s energy regulator has kicked off a period for public comments and hearings on Eskom’s pricing deals with Samancor Chrome and the Glencore-Merafe Chrome Venture.
- A planned tariff of 62 cents per kilowatt-hour is designed to keep energy-intensive ferrochrome smelters running, following a steep jump in electricity prices.
- Glencore-Merafe’s final sign-off is still hanging on regulatory approval and a few other requirements, with the retrenchment deadline now moved to May 11.
South Africa’s energy regulator on Wednesday kicked Glencore plc’s chrome smelter rescue proposal into the public arena, inviting written feedback and announcing a hearing on Eskom’s revised pricing deals with Samancor Chrome and the Glencore-Merafe Chrome Venture. That move brings the sought-after power tariff breaks to the National Energy Regulator of South Africa, or Nersa, following several weeks of debate on restarting smelters without triggering another round of layoffs.
Electricity costs are now the decisive factor for South Africa’s ferrochrome sector. Producing ferrochrome—an alloy of chromium and iron that’s key for stainless steel—demands hefty energy use; steep power tariffs have eroded the country’s edge, putting South African players behind Chinese rivals, despite still holding significant chrome ore reserves.
Eskom on April 10 said it had wrapped up a 62c/kWh electricity tariff deal for Samancor Chrome and the Glencore-Merafe smelters, pending Nersa’s sign-off. The utility argued this arrangement should help its liquidity, secure predictable sales for as long as five years, and sidestep steeper general tariffs, extra borrowing, or an increased call on the state.
Glencore-Merafe has, for now, given a provisional nod to Eskom’s updated terms—though that’s still hanging on a few things: more details, broader industry buy-in, and green light from Nersa. The joint venture wants regulators to move fast and, in the meantime, has shifted the end date for its Section 189 labor process—South Africa’s retrenchment consultation—to May 11.
Japie Fullard, who leads Glencore Ferroalloys, told Argus this week that with Eskom’s tariff relief in place, Glencore is set to bring ferrochrome production back online at previously closed South African sites. “The 62 [cents/kWh] will actually give us just a breakeven,” Fullard said. At that electricity price, Glencore-Merafe plans to retain jobs—even if there’s no profit in ferrochrome for now. Argus Media
The revised tariff, now set below the interim 87.74c/kWh, stands in stark contrast to the 1.36 rand per kWh charged at 2025’s close, according to Reuters. Eskom’s rate reduction in February was framed as a lifeline—aimed at staving off massive layoffs, with just 11 out of 66 eligible South African smelters still up and running at the time, mostly due to crippling electricity expenses.
Competition is straight to the point here. Samancor and Glencore-Merafe stand out as the local ferrochrome firms included in the relief package. Chinese rivals keep advancing as more South African smelters idle or reduce output. According to Argus, energy makes up 30% to 40% of the production bill for South African ferrochrome makers.
Fullard told Argus that Samancor and Glencore combined for roughly 1 million tonnes of ferrochrome output in 2025. The new arrangement could push that figure to 4.5 million tonnes annually, he said. The agreement features an upside-sharing provision as well, with Eskom set to get a slice of the profits if market conditions pick up.
The deal remains incomplete. Nersa must still sign off on changes to the pricing agreements, and Glencore-Merafe has only given a conditional yes. Delays, stricter terms, or a slump in chrome prices could make sections of the smelter network unviable—especially if Chinese energy becomes cheaper or South Africa can’t fix its industrial power supply for the long haul.
Glencore’s move may not stack up to its much larger copper, coal, or trading operations, but it’s significant for the company’s presence in South Africa—and for a government eager to keep industrial jobs on the map. Shares in Glencore climbed with other miners like Fresnillo, Rio Tinto, and Anglo American, all up between 2% and 3% on Wednesday as metals prices advanced. The FTSE 100, though, still slipped 0.2% by the close.
