RETRENCHMENTS will commence at the idled Wonderkop and Boeshoek smelters in South Africa, operated by the Glencore-Merafe Chrome Venture.
Some employees at Glencore’s Alloys division would also be affected, the mining and commodities marketing group announced on Tuesday.
This comes in the absence of a new electricity tariff that was under negotiation with the South African government.
According to Solidarity, a union, some 2,425 direct jobs and more than 17,000 indirect jobs will be affected. Glencore said in its announcement, however, that its Lion smelter would continue to be operational. Boshoek and Wonderkop would be placed on care and maintenance.
Glencore laid the retrenchments at the door of government which owns Eskom. “Despite its (the Glencore-Merafe Chrome Venture) engagement with Government no viable interventions or solutions have been presented to address the severe challenges impacting our ferrochrome operations, the most pressing requirement being the provision of a competitive energy tariff,” Glencore said.
“As a result, in the absence of any viable solution from the Government, retrenchments will commence within the next couple of weeks,” it added.
Glencore alerted the market to the threat of retrenchments on September 1 when it initiatied a Section 189 process in terms of South Africa’s Labour Relations Act.
The Joint Venture had earlier suspended its Boshoek smelter and its Wonderkop operations. This follows the shuttering of 10 other smelters. It also suspended ferrochome production from the Lion Complex facilities, ostensibly to conduct maintenance.
Govt no-show?
The South African government suggested it was ready to present a competitive tariff after Cabinet approved a plan for intensive energy users earlier this year, according to Electricity minister Kgosientsho Ramokgopa. “We are going to restart smelters,” Ramokgopa said.
“We are working with government to find solutions. And we are, in my view, fairly close to a possible solution,” said Japie Fullard, head of operations at the Merafe-Glencore JV in late July.
“There’s already a special tariff, but unfortunately that special tariff is not special enough for us to actually be viable in South Africa,” Fullard then said in August.
Said Glencore today: “These operations have long been a cornerstone of local economic activity. The potential closure of these smelters will result in significant job losses and have a devastating impact on employees, their families, and the surrounding communities”.
The Glencore-Merafe Chrome Venture has capacity for 2.3 million tons (Mt) in ferrochrome production – equal to a third of South Africa’s annual exports in the mineral.
South Africa has lost an estimated 300,000-350,000 jobs due to the closure of 14 energy-intensive smelters across the country. In 2024, South Africa supplied about 3.3Mt of ferrochrome out of a global production total of 17.5Mt. Merafe has installed capacity of 2.3Mt a year.
Merafe has a 20.5% stake in the JV while Glencore owns the balance.
