GLENCORE Merafe Joint Venture said on Friday it would keep its ferrochrome operations in South Africa open for another month, until the end of March, in order to finalise terms for a lower electricity tariff that would ensure its production was sustainable.
This followed an announcement by Government earlier in the day reducing the cost of electricity for the ferroalloys industry to 62c per kilowatt hour which is well below 87c/kWh previously negotiated with the sector. However, the reduced tariff requires the support of South Africa’s energy regulator Nersa.
Kgosientsho Ramokgopa, the country’s electricity minister, described the lower rate as among the most important of his tenure so far. President Cyril Ramaphosa created the electricity ministry in 2023 owing to the severity of the power crisis in South Africa.
Glencore Merafe welcomed the announcement but said it would yet finally shutter its ferrochrome facilities on March 30 if a definitive agreement was not reached. It had set a deadline of February 28 previously.
“The venture notes that the associated terms, conditions, and contractual framework are still being finalised and remain subject to Nersa approval,” Glencore Merafe Chrome Venture said in its statement.
“As a responsible operator, the Venture must ensure that no binding commitments are unduly onerous or place the business at risk,” it said.
“If agreement on the terms and conditions and implementation of the 62 c/kWh tariff is not reached on or before 31 March 2026 , the Venture will regrettably have no option but to proceed with the execution of the Section 189 terminations in accordance with applicable legislation,” it said.
Only 11 of South Africa’s 66 smelter furnaces are currently operational, accorrding to a report by News24. Ramokgopa said the tariff would bring 45 furnaces back into production by December, with a further four expected online by end-2027.
The measure is projected to support more than 11,400 direct jobs and over 100,200 indirect positions, generate R76bn in export earnings and deliver R17.9bn in additional revenue to Eskom, said News24. The fiscus would benefit by around R5.5bn.
