Zanele Matlala

2025 was a tough year for Zanele Matlala and Merafe as escalating power costs and Chinese competition combined to make the company’s ferrochrome venture with Glencore unviable. The Boshoek and Wonderkop smelters were slated to go idle on January 1, 2026 with 2,400 jobs on the line. But in December, the company said after engagements with state-run power utility Eskom and other stakeholders that consultations “aimed at finding a workable energy solution for the ferrochrome industry” would continue – though only to end-February when a solution was required.

Such scenarios have played out in other industries including steel, raising fears that South Africa’s slow-growth economy is sliding down a path of deindustrialisation – and taking from Eskom some of its biggest customers in the process. In a country with shocking levels of unemployment, the political and social stakes in this unfolding drama are sky-high. Launched in 2004, the Glencore-Merafe Chrome Venture was once the world’s largest ferrochrome producer and a gem of South African industry. But surging energy and labour costs rendered the operations uncompetitive in the face of Chinese industry, which is powered by cheap electricity. “Our chrome business will need to adapt to potential shifts in domestic demand, while continuing to monitor the significant influence of the Chinese market,” Matlala said when the company unveiled interim 2025 results.

Stay tuned for 2026, which will be a pivotal year for South Africa’s ailing ferrochrome industry and Merafe. Ultimately, smelters are power-intensive, and cheaper power is needed. There’s also the question of whether Merafe becomes an orphan asset in the event of a Glencore-Rio Tinto merger, which is currently being discussed.