- Glencore says its South African ferrochrome smelters may shut down because electricity costs are too high.
- The company warned that more than 1,000 jobs are at risk if no new power deal is reached with Eskom.
- Talks are still underway, but Glencore says it cannot run smelters that lose money.
SWISS mining group Glencore has warned that its ferrochrome operations in South Africa may shut down as negotiations over a discounted electricity package stall.
The company says its smelters cannot operate sustainably under current power costs.
Eskom offered a reduced tariff of 62 South African cents per kilowatt‑hour to the country’s two largest ferrochrome producers, including Glencore, in an effort to keep the plants running. The rate is a steep cut from the standard R1.36/kWh.
However, Glencore says the conditions attached to the offer are not workable.
“If they do not come to the party, we are going to walk away from the 62 cents deal,” said Japie Fullard, head of Glencore’s South African ferroalloys division, speaking at a Johannesburg mining conference.
The company has given Eskom and government officials a deadline to revise the proposal. According to Business Day, Glencore said it would proceed with retrenchments if no revised terms are submitted to the National Energy Regulator of South Africa (NERSA) by March 31.
Up to 1,500 jobs are at risk across Glencore’s ferrochrome operations if the smelters become unprofitable under current power costs, according to industry notices.
Glencore has argued that some conditions in Eskom’s relief package are “commercially unworkable and unsustainable for ferrochrome producers,” and has submitted a counterproposal to the government.
The dispute comes as South Africa continues to face severe electricity shortages and rising operational costs. Energy‑intensive industries such as ferrochrome smelting have been among the hardest hit by load‑shedding and tariff increases.
Another major producer, Samancor Chrome, which received the same discounted tariff offer, has already indicated it will move forward with workforce reductions despite ongoing discussions.
Industry unions have raised concerns about the potential impact on workers and local economies. The National Union of Metalworkers of South Africa (NUMSA) has called on smelter operators to halt retrenchment plans and return to negotiations.
Glencore says it remains open to further talks but warned that time is running out. The company has stressed that without a workable electricity agreement, its ferrochrome smelters cannot continue operating.
The outcome of the negotiations will determine whether one of South Africa’s largest ferrochrome producers can remain viable amid the country’s deepening power crisis.
