Glencore’s South African smelters near job-cut deadline on power

Glencore Plc’s ferrochrome smelting venture in South Africa is running out of time to find a solution that would lower electricity costs and enable it to avert job cuts.

The business with Merafe Resources that processes chrome ore into ferrochrome extended a consultation process around the potential losses in December to the end of this month. About 1 500 direct jobs are at stake if no solution is reached to provide cheaper power, Japie Fullard, chief executive officer of Glencore Alloys, said in an interview.

Read: Nersa approves electricity tariff relief for ferrochrome smelters

South Africa’s Electricity Minister Kgosientsho Ramokgopa has been searching for a solution to rising electricity costs. The local ferrochrome industry highlighted the problem with competition in China taking a growing share of its business, in part due to the benefit of cheap power.

Following talks with the government and state-owned utility Eskom, the National Energy Regulator of South Africa approved a 35% year-long reduction in power prices for ferrochrome smelters operated by Glencore-Merafe Chrome and Samancor Chrome.

That’s allowed the startup of the venture’s Lion smelter in Limpopo province, which is able to roughly break even at the 87 rand cents ($0.05) per kilowatt hour level, according to Fullard. “We’re actually commissioning the first two furnaces this week.”

Read: Nersa approves interim tariff discount for Glencore-Merafe and Samancor smelters

The Glencore venture’s Boshoek and Wonderkop smelters that were shuttered in December need an even lower price sought by the broader industry of 62 cents, he said, adding that a stronger rand has added further strain.

Samancor faced cuts of nearly 2 500 workers, labour union Solidarity said in November.

Read: Read: Electricity Minister: Private players won’t be allowed to cherry-pick

The business, government, Eskom and labour have worked together in the search for a solution to bring the electricity cost down, according to Fullard. Still, it takes capital to restart operations that companies need to justify.

Read: SA to boost grid capacity as it seeks to end blackouts

“Whatever solution is being put on the table mustn’t be fluff,” he said. “It must be hard, concrete action.”

© 2026 Bloomberg

Follow Moneyweb’s in-depth finance and business news on WhatsApp here.