Glencore Plc\u2019s 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.<\/p>\n
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.<\/p>\n
Read: Nersa approves electricity tariff relief for ferrochrome smelters<\/p>\n
South Africa\u2019s 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.<\/p>\n
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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.<\/p>\n
That\u2019s allowed the startup of the venture\u2019s 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. \u201cWe\u2019re actually commissioning the first two furnaces this week.\u201d<\/p>\n
Read: Nersa approves interim tariff discount for Glencore-Merafe and Samancor smelters<\/p>\n
The Glencore venture\u2019s 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.<\/p>\n
Samancor faced cuts of nearly 2 500 workers, labour union Solidarity said in November.<\/p>\n
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Read: Read: Electricity Minister: Private players won\u2019t be allowed to cherry-pick<\/p>\n
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.<\/p>\n
Read: SA to boost grid capacity as it seeks to end blackouts<\/p>\n
\u201cWhatever solution is being put on the table mustn\u2019t be fluff,\u201d he said. \u201cIt must be hard, concrete action.\u201d<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
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