Thousands of South African Jobs Could Be Saved
Eskom has signed a Memorandum of Understanding (MoU) with major ferrochrome producers Samancor Chrome and the Glencore–Merafe Chrome Venture, opening the door to preventing thousands of job losses in South Africa’s struggling ferrochrome sector.
What the MoU Does
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Establishes a joint commitment to develop a long-term, sustainable plan for the ferrochrome industry.
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Creates a multi-stakeholder task team including Eskom, government, and the two smelters.
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The task team will focus on electricity pricing solutions that improve industrial competitiveness without increasing costs for other customers.
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A proposed solution must be delivered within three months.
Why It’s Needed
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Smelters began issuing Section 189 retrenchment notices as electricity costs and weak market conditions made operations unsustainable.
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Glencore planned to idle its Boshoek and Wonderkop smelters from 1 January, putting 2,400 jobs at risk.
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Samancor also warned it may cut up to 2,496 jobs.
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South Africa’s ferrochrome industry, once a global leader, has been hit by unreliable power supply and soaring tariffs, losing ground to China since 2012.
Current Electricity Pricing Context
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Samancor and Glencore–Merafe operate under Negotiated Pricing Agreements (NPAs) approved by NERSA in 2023.
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These six-year NPAs aim to support energy-intensive industries with more competitive tariffs.
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Both smelters triggered hardship provisions this year due to worsening market conditions.
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Eskom received a temporary waiver on take-or-pay obligations, but this highlighted the need for a long-term fix.
Next Steps
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NERSA is reviewing an interim tariff adjustment application for the smelters.
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Government is developing a complementary pricing mechanism, expected within three months.
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Once interim tariffs are approved, smelters will:
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Suspend retrenchments, and
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Restart around 40% of furnace capacity while the long-term plan is finalized under the MoU.
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