JOHANNESBURG, April 2, 2026, 16:23 SAST
Glencore plc’s South African ferrochrome operation has delayed its potential layoff decision to April 7, after utility Eskom requested another week to wrap up internal sign-off on a cut-rate electricity deal for the embattled sector. Negotiations hang on a 62 South African cent per kilowatt-hour tariff—the price point the venture insists is necessary for smelter survival.
The timing isn’t trivial. Glencore has tied the fate of mothballed smelters—and jobs—to cheaper power, as South Africa’s ferrochrome industry faces mounting strain. Back on March 19, Glencore Ferroalloys CEO Japie Fullard flagged as many as 1,500 jobs on the line without a viable agreement. Samancor Chrome, meanwhile, has already started cutting staff, even with the same headline tariff break in hand.
Power sits at the heart of the struggle. Since 2008, electricity tariffs have surged over 900%, according to Reuters, leaving South Africa’s smelters under heavy strain. Just 11 out of 66 are still running. The country has ceded a chunk of the ferrochrome market—essential for stainless steel—to Chinese rivals.
The Glencore-Merafe Chrome Venture said in a March 31 statement that Eskom has given the 62 c/kWh tariff its initial nod, though the utility is still moving through its own internal governance. The Section 189 process—the required legal consultation ahead of any retrenchments in South Africa—is now set to extend through April 7.
The venture said it put in a final counterproposal to Eskom back on March 12, saying certain attached conditions just didn’t make commercial sense. Still, even if there’s a new deal, it can’t move forward without a green light from NERSA, South Africa’s energy regulator.
Fullard made it clear just how little room was left to maneuver. Last month, he said Glencore would not be “in a position to sign” if the terms didn’t change, and added the company might “walk away” from the 62-cent deal. Reuters
Eskom slashed its tariff in February, dropping the rate to 62 South African cents per kilowatt-hour—down from an interim 87.74 cents—after NERSA signed off in January on a 35% relief package. Before that, the tariff stood at 1.36 rand. Electricity Minister Kgosientsho Ramokgopa said the move was meant to prevent more shutdowns in an industry the government is trying to bring back.
January’s earlier tariff reduction brought Lion’s smelter back online in February after nine months idle. Still, Merafe pointed out that Boshoek and Wonderkop are both stuck offline, needing that 62-cent rate just to operate sustainably. Glencore, for its part, isn’t letting up on the push for a permanent lower tariff—temporary relief won’t cut it.
Merafe’s 2025 numbers laid bare the price of waiting. The company reported a steep 63% plunge in ferrochrome output from the Glencore-Merafe partnership, dropping to 112,000 metric tons last year. Production costs didn’t cooperate either, jumping 14% as idled plants pushed expenses higher.
Still, the deal isn’t locked in yet. NERSA has to sign off on the revised tariff, and it’s worth noting that January’s relief only happened after the government agreed to cover the difference between the old price and the new discount—regular users weren’t left footing the bill. Samancor has pressed ahead with layoffs, impacting around 2,400 workers.
Eskom in December floated the idea of an interim tariff—something that could let Samancor and the Glencore-Merafe joint venture hit pause on layoffs and restart close to 40% of their furnace output, at least until a more permanent solution is on the table. Glencore points out that South Africa still owns around 80% of global chrome ore reserves. For now, the extension means that relief plan hangs on for another week.
