GLENCORE Merafe Chrome Venture produced 51% less ferrochrome year-to-date as high energy prices forced it to cut smelter capacity.
Ferrochrome for the first nine months of its 2025 financial year totalled 709,000 tons, the venture said in which Merafe Resources has a one fifth stake. On an attributable basis, Merafe’s production totalled 112,000 tons compared to 230,000 tons for the nine months of the 2024 financial year.
The venture said in September it could retrench thousands of employees after deciding to shutter its smelters amid above-inflation energy supply from Eskom, South Africa’s state-owned power utility.
It suspended ferrochome production from its Lion Complex facilities, ostensibly to conduct maintenance. Merafe also suspended its Boshoek smelter and its Wonderkop operations. This follows the shuttering of 10 other smelters.
Merafe, Glencore and Eskom are said to be working on a new tariff but it is not yet agreed despite the distress at the ferrochrome operations being extensively flagged. Electricity minister, Kgosientsho Ramokgopa said earlier this year a proposal was before Cabinet on improved tariffs for intensive energy users.
Instead of producing ferrochrome, the venture is exporting chrome ore produced at its mines. Chrome production for the nine months was down 3% to 710,000 tons. The decline was blamed on “temporary equipment breakdowns”.
Globally, smelters are struggling to cope with high energy costs. Reuters reported today that Rio Tinto was considering closing its largest aluminium smelter Tomago Aluminium as it struggles to source power at commercially viable rates beyond 2028 when its current power deal expires.
Australian smelters are struggling with high energy prices as the country transitions to renewables, said Reuters. In the case of Tomago, it was built last century to take advantage of Australia’s plentiful and cheap coal, the newswire said.
Earlier this month, Australia announced a A$600m ($389m) bailout over three years for Glencore’s Mount Isa copper smelter and Townsville refinery. Trafigura’s Nyrstar lead and zinc operations and the Whyalla steel plant have also received government support, said Reuters.
